ADX Energy Ltd
ABN 50 009 058 646
ANNUAL REPORT
31 DECEMBER 2023
ADX ENERGY LTD
CONTENTS
Contents
Page
Corporate Directory………………………………………………………………………………………………………… 2
Chairman’s Report………………………………………………………………………………………………………….. 3
Operations Report…………………………………………………………………………………………………………… 7
Reserves Report……………………………………………………………………………………………………………… 27
Directors’ Report……………………………………………………………………………………………………………… 32
Auditors’ Independence Declaration to the Directors…………………………………………………… 47
Directors’ Declaration……………………………………………………………………………………………………… 48
Consolidated Statement of Profit or Loss and Other Comprehensive Income………………….. 49
Consolidated Statement of Financial Position………………………………………………………………….. 50
Consolidated Statement of Changes in Equity…………………………………………………………………. 51
Consolidated Statement of Cash Flows……………………………………………………………………………. 52
Notes to the Financial Statements…………………………………………………………………………………… 53
Independent Auditor’s Report…………………………………………………………………………………………. 91
Additional Shareholder Information………………………………………………………………………………… 96
Tenement Schedule…………………………………………………………………………………………………………. 99
- 1 -
ADX ENERGY LTD
CORPORATE DIRECTORY
Directors
Ian Tchacos (Executive Chairman)
Paul Fink (Technical Director / CEO)
Edouard Etienvre (Non-Executive Director)
John Begg (Non-Executive Director)
Company Secretaries
Peter Ironside
Amanda Sparks
Registered and Principal Office
29 Bay Road
Claremont, Western Australia 6010
Telephone:
Web Page: www.adxenergy.com.au
Email: admin@adxenergy.com.au
+61 8 9381 4266
Share Registry
Computershare Investor Services Pty Ltd
Level 17
221 St George’s Terrace
Perth, Western Australia 6000
Telephone: +61 8 9323 2001
Facsimile: +61 8 9323 2033
Solicitors
Steinepreis Paganin
Level 4, Next Building
16 Milligan Street
Perth Western Australia 6000
Bankers
Commonwealth Bank of Australia
1254 Hay Street
West Perth Western Australia 6005
Stock Exchange Listing
Australian Securities Exchange Ltd
152-158 St Georges Terrace
Perth Western Australia 6000
ASX Code: ADX
Auditors
InCorp Audit & Assurance Pty Ltd (formerly Rothsay Audit & Assurance Pty Ltd)
Suite 11, 4 Ventnor Avenue
West Perth, Western Australia 6005
- 2 -
ADX ENERGY LTD
CHAIRMAN’S REPORT
Dear Shareholder,
During the year ended 31 December 2023, ADX Energy Ltd (“ADX” or the “Company”) has progressed the development of
its business in Austria in a number of important areas. Your Company has established three new asset partnerships through
valuable farmouts to progress appraisal and exploration activities in Upper Austria, added to its Vienna basin fields
production with sustained and stable oil production testing at its Anshof oil discovery and the drilling of the Anshof-2
appraisal well. ADX also finalised permitting for the large Welchau gas prospect, early results from which indicate a gas-
condensate discovery that can be transformational for the Company.
The establishment of our partnerships has been made possible by the development of a partnership structure for the first
time in Austria that has been approved by Bundesministerium für Finanzen (Finance Ministry) to ensure compliance with
the terms of our underlying exploration contracts in Upper Austria, thereby providing a clear commercial framework for
further co-investment in our attractive portfolio of assets. Our progress during 2023 places the Company on a trajectory
of establishing strong underlying value development through increasing production and reserves growth as well as
exposing our Shareholders to exceptional value generation opportunities via an active exploration program funded
primarily via farmout transactions and cash flow.
In addition to the above-mentioned asset and commercial activities, the Company has been able to access capital necessary
to carry out its activities and continue to build its asset base via a combination of placements and loan note transactions.
Of particular importance, given the focus of our activities, the Company has been able to expand its shareholder base into
the United Kingdom and Europe.
The RED E200 drill rig prior to well spud at the Welchau-1 location, ADX-AT-II licence in Upper Austria
Subsequent to the year-end, ADX announced a gas and liquids hydrocarbon discovery at the Welchau-1 gas exploration
well. The drilling and evaluation results indicate a structural outcome similar to the predrill prognosis, a large gross
hydrocarbon column (356 metres) supported by excellent liquids rich gas shows and a flow of gas and hydrocarbon liquids
to surface, evidence of good open fracture and vuggy porosity (required for good well productivity in carbonate reservoirs)
and an excellent correlation between gas shows and fractures as well as the vuggy porosity confirmed on logs. While we
were unable to complete our sampling program in the well, the results are very positive and the potential of the discovery
remains undiminished. We now look forward to reporting further analysis of drilling results culminating in the
announcement of a Contingent Resource prior to testing the well in October 2024. This will then allow us to confirm the
flow rate potential of the well and, if successful, the reserves potential of Welchau.
It is truly a very compelling economic proposition to discover a potentially large gas resource in the heart of Europe, at
shallow drill depths and adjacent to infrastructure in a market in great need for domestic gas.
- 3 -
ADX ENERGY LTD
CHAIRMAN’S REPORT
Energy markets in Europe have been in turmoil since Russia’s invasion of Ukraine in February 2022. Gas markets have
fundamentally changed due to the phasing out of Russian gas and an increased reliance on imported LNG resulting in
structurally higher prices in Europe together with ongoing market volatility. Austria is very vulnerable on the supply side,
importing 87% of its gas, with 65% sourced from Russia via Ukraine in calendar year 2023. Anything we can do to increase
domestic gas supply will be of significant importance for the energy security and economy of the Republic of Austria.
During the year, ADX has enjoyed the benefit of working in an efficient, transparent and supportive licensing regime made
possible by having competent people on the ground that can operate assets, originate new investment opportunities and
introduce partners to fund the Company’s growth. These attributes are becoming particularly rare amongst junior energy
companies, and favourably distinguishes ADX from its peers.
Our business in Austria is growing rapidly, enabled by the availability of an extensive 3D seismic data, the ability to rapidly
secure permitting for our drilling and production activities, access to infrastructure and the high value pricing for our oil
and gas.
Anshof is a great case study for what can be achieved in Austria - we commenced permitting the discovery well in July 2021
after securing the exploration permit in January of that year. We spudded the well in December 2021 and announced a
discovery in January 2022. We tested the well in April 2022 and had the well on long-term production test by October
2022. It is stunning progress in comparison to other jurisdictions. I don’t know of many places, other than perhaps Texas,
where that can be achieved.
Production operations during the year resulted in an increase in production from 238 BOEPD in 2022 compared to an
average of approximately 287 BOEPD in 2023. The boost in production coming largely from the contribution from the
Anshof discovery while that was on long term test. We hope to build on the production rate at Anshof with the installation
of a permanent production facility with a processing capacity of up to 3000 BOPD of liquids and plan to drill two additional
wells at the location during 2024.
Sales revenues from Austrian Production during the year totalled A$ 12,175,000 net to ADX. This was a 16% decrease
compared to the year ending 31 December 2022. The decrease in revenue is mainly the result of a decrease in product
prices. The average received crude oil price was reduced from A$132.48/bbl to in 2022 to A$115.19/bbl in 2023.
Oil Tanker Loading during Anshof-3 Long term Production Test, ADX-AT-II licence in Upper Austria
While capital markets remained relatively tight, ADX was able to raise A$ 6.4 million from a placement and share purchase
plan in November last year. The issue was oversubscribed, and it was significant that approximately 40% of the funds were
sourced from European and UK investors. It is becoming increasingly apparent that ADX’ activities are starting to resonate
with European investors who have experienced high energy prices and supply insecurity.
2023 was a busy year operationally. We achieved some important targets with the long-term stable production test from
the Anshof-3 discovery well as well as the procurement and commencement of installation of a permanent production
facility at Anshof which will facilitate increased stable production. The results of the Anshof-2 appraisal well were a
temporary setback, however, we expect that a side track well will deliver a positive result and add to the soon-to-
recommence production at Anshof-3 once the permanent facility is commissioned in late March 2024/early April 2024.
- 4 -
ADX ENERGY LTD
CHAIRMAN’S REPORT
We are planning for the Anshof-2 side track to be followed up with a further appraisal well later in the year, with the goal
being to have three wells producing at Anshof by year-end.
We are very pleased to introduce a high-quality, collaborative partner to the Anshof project. The Anshof-2 and the planned
Anshof-1 well will be predominantly funded via the investment agreement with MND Austria a.s. (“MND”). MND have
funded past costs and long lead drilling expenditures of EUR 1,932,000 and have total firm investment payment obligations
of EUR 5,280,000 for the drilling, completion and tie-in of the Anshof-2 and Anshof-1 wells. Under the terms of the
investment agreement MND will earn a 30% economic interest in the Anshof Field Area.
A further partnership transaction was completed with MND after year end. MND paid back costs of EUR 450,000 to ADX
and has committed to fund EUR 4,500,000 of exploration drilling expenditure to earn a 50% economic interest in an
investment area within the ADX-AT-I exploration licence where the partnership plans to drill a further gas exploration well
in Q4 2024.
In addition to our partnerships with MND we have a very important investment agreement with TSXV-listed MCF Energy
Ltd. (“MCF”) that has delivered significant funding for the drilling of the successful Welchau-1 well. MCF have paid back
costs and will fund 50% of the Welchau-1 well costs up to EUR 5.1 million to earn a 25% economic interest in the Welchau
Investment Area.
MCF Energy CEO Jim Hill (left) and ADX Energy Executive Chairman Ian Tchacos on location at Welchau
All in all, 2023 has been a very positive year however, it was with deep regret after year end that I reported the illness of
our Chief Executive Officer, Mr Paul Fink. Paul has made an exceptional contribution to the growth of the Company. I am
now very happy to report that Paul is on the mend and is likely to resume his duties in the coming months.
I would also like to thank Mr Andrew Childs, who retired as a Non-Executive Director, and welcome Mr John Begg as our
new Non-Executive Director. John brings a wealth of talent to our board, he is a highly experienced energy professional
that has been instrumental in the discovery and commercialisation of numerous oil and gas fields in Australia, North Africa,
SE Asia and California.
- 5 -
ADX ENERGY LTD
CHAIRMAN’S REPORT
Looking forward, we have a very active and exciting year ahead of us which we expect will include the following important
milestones:
The further evaluation, assessment and testing of the potentially transformational Welchau gas liquids discovery,
The imminent commissioning of the Anshof permanent production facility and the recommencement of production
from the Anshof-3 well,
The drilling of the Anshof-2 side track and the Anshof-1 appraisal wells which have the potential to significantly
boost production at Anshof,
The drilling of a further gas exploration well funded by our partner MND in the ADX-AT-I permit and
The ongoing development of our highly prospective exploration portfolio.
Your Board believes that your Company has a compelling investment proposition provided by the combination of
production, reserves growth and an active exploration program mainly funded by farmin transactions.
The recent potentially large discovery at Welchau validates the quality of the ADX’ Teams asset selection and adds a
uniquely strategic and potentially transformative dimension to ADX’ near term future as a European energy company.
We thank you for your support and look forward to reporting a very exciting period in the Company’s development.
IAN TCHACOS
Executive Chairman
- 6 -
ADX ENERGY LTD
OPERATIONS REPORT
OPERATIONS REVIEW
Europe Energy Markets Overview
Russia’s invasion of Ukraine in February 2022 has fundamentally changed the European gas market by:
phasing out Russian gas supplies (down 84%);
increasing supplies of and reliance on liquified natural gas (LNG);
causing structurally higher prices above historical averages; and
enhancing market volatility.
However, after the unprecedented market conditions experienced in 2022; the natural gas market in Europe gradually re-
balanced in 2023 due to softer demand caused by mild weather for the past two winters; and reduced consumption (power
generation, residential and industrial). During the period, natural gas consumption in Europe dropped by 7% to its lowest
level since 1995.
LNG is now the main source of natural gas supply in Europe contributing to 42% of the supply. However, the increase in
global LNG production only represents 34% of the decrease in Russian piped gas deliveries to Europe. As a result, natural
gas supply in Europe remains tight which creates uncertainty and volatility.
Despite a steep decline in natural gas prices in Europe (down 68% in 2023), these remain elevated and substantially above
historical averages. There is also a strong correlation between European gas price and Asian LNG price benchmarks.
Natural gas and Brent crude oil prices 2018-2026
Whilst market conditions have improved, security of supply remains a key concern; primarily in winter. For the past two
winters, temperatures above seasonal average has distorted the actual impact of the gas supply shock faced since February
2022. However, this risk is acknowledged by market participants and illustrated by the wide summer/winter spreads
observed in the futures market.
Domestic gas production does not provide a much-needed safety net. It declined by approx. 10% in 2023 mainly due to
the shutdown in October 2023 of the giant Groningen field in The Netherlands. Europe’s gas production is expected to
drop by an additional 7% by 2026.
- 7 -
ADX ENERGY LTD
OPERATIONS REPORT
Further reduction in piped gas supplies from Russia is also contributing to supply uncertainty. Piped gas supplies from
Russia to Europe halved in 2023 (lowest level since the 1970s). Further reduction is anticipated from the end of October
2024 with the expiry of the Ukraine gas transit contract which the Ukrainian government is not willing to renew.
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Quarterly natural gas supply in Europe (2023)
LNG supply to Europe cannot be taken for granted. Reliance on spot LNG cargoes carries significant supply chain
uncertainties and risk of diversion to more attractive markets. China regained its position as the World’s largest LNG
importer in 2023 (imported quantities up by 14%) and LNG demand in the Asia-Pacific grew by 4%. This combined with
lower demand for LNG in Europe have led the Platts LNG Japan-Korean Marker to trade at a USD 10.7 per boe premium to
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- 8 -
ADX ENERGY LTD
OPERATIONS REPORT
Electricity prices experienced a steep correction in 2023 (annual average down by 61%) in line with the decline of natural
gas prices after record highs in 2022. However, electricity prices remain 200% higher than in 2019.
After dropping by 3.1% in 2022, demand for electricity in Europe declined further in 2023 (down 3.2%) to the level of the
early 2000’s due to:
economic slowdown in Europe;
energy efficiencies and mild winter weather; and
depressed industrial demand (-5.8% in 2022 and -6.0% in 2023) mainly from energy intensive industries such as
chemicals and metals processing.
Supply recovery also contributed to the price re-adjustment. Whilst gas-fired power generation declined sharply in 2023,
hydropower generation recovered (+16% in 2023 vs -20% in 2022) and availability of nuclear power generation improved
after extensive maintenance in France.
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Wholesale electricity prices in Austria (2020-2023)
European electricity demand outlook is strong for the next three years. Demand is expected to gradually return to 2021
levels by end of 2026 (+2.3% p.a. on average over the 2024 to 2026 period).
Despite some structural demand destruction in energy-intensive industries, a recovery in electricity demand is anticipated
due to more moderate prices and expanding electrification (electric vehicles, heat pumps, data centres, etc.). It is
anticipated that electricity demand will grow by +2.5% p.a. in 2025 and 2026.
- 9 -
ADX ENERGY LTD
OPERATIONS REPORT
ASSET ACTIVITIES SUMMARY
PRODUCTION AND DEVELOPMENT - VIENNA BASIN FIELDS AND ANSHOF DISCOVERY AREA - ONSHORE AUSTRIA
ADX is operator and holds a 100% interest in the Vienna Basin Fields.
ADX is operator and held an 80% economic interest in the Anshof Discovery Area (excluding the Anshof-2 well) until
15 September 2023 reducing to 50% for the remainder of the period following the finalisation of the Anshof
Investment Agreement.
ADX is Operator and holds a 60% economic interest in the Anshof-2 well.
The production rate net to ADX from the Vienna Basin Fields and the Anshof Discovery Area (collectively, Austrian
Production) during the year averaged approximately 287 BOEPD compared to 238 BOEPD for the year ending December
2022. Stable oil and gas production continued during the year from the 100% ADX owned Vienna Basin Fields producing
an average of 221 BOEPD.
The 20% increase in average production was due to Anshof-3 test production through to October contributing an average
66 BOEPD net to ADX over the year shown in the figure below. After coming online in October 2022, the Anshof-3 well was
shut in on 19th September 2023 after reaching the regulatory limit of 5,000 tonnes (36,000 barrels) for test production.
Anshof-3 production is expected to recommence after the installation and commissioning of a permanent production
facility in late March 2024/early April 2024.
Austrian monthly and average daily oil equivalent production rate for oil, gas and total BOEPD
- 10 -
ADX ENERGY LTD
OPERATIONS REPORT
Sales revenues from Austrian Production during the year totalled A$ 12,175,000 net to ADX, a 16% decrease compared to
the year ended 31 December 2022. The decrease in revenue is the result of a decrease in product prices. The average crude
oil price received reduced from A$132.48/bbl to in 2022 to A$115.19/bbl in 2023 and the gas prices came off record highs
delivering an average of A$371.69/BOE in 2022 reducing to A$130.47/BOE. Notwithstanding that gas prices have come off
the 2022 record highs, gas prices achieved from the Vienna Basin in 2023 continue to outstrip oil prices.
The figure below shows the variation in monthly sales revenue and the revenue contribution from the Anshof-3 well test.
Austrian Production monthly oil and gas sales revenue
Due to volatile market conditions and in line with its rolling hedging strategy, ADX seeks to provide stability for near term
revenue generation, ADX hedged approximately 100 BOPD from April 2023 through to the end of the period. On 5 April
2023 a total of 16,440 barrels for the period between 1 April 2023 to 30 September 2023 was hedged under a swap contract
at a fixed price of USD 82.94 per barrel (Dated Brent price). On 27 July 2023, ADX executed further hedging transactions
with a fixed price swap contract for 15,810 barrels of oil at a fixed Brent crude oil price for August 2023 to December 2023
at USD 81.45 per barrel. The hedging counterparty for both transactions was Britannic Trading Limited (a trading entity of
BP).
The balance of the crude oil production from the Vienna basin fields and all of ADX’ share of the crude oil production from
the Anshof field was unhedged allowing ADX to maintain exposure to upside in Brent crude oil pricing. Gas production
from the Vienna basin fields was also unhedged.
- 11 -
ADX ENERGY LTD
OPERATIONS REPORT
Vienna Basin Fields
Gaiselberg and Zistersdorf (collectively the Vienna Basin Fields) continued stable and low-emissions oil and gas production
through 2023. 80,874 BOE were produced and sold into the European market.
The following table summarises ADX’ unaudited estimates of Developed Reserves as at 31 December 2023, based on
reserves reported 31 December 2022, less production from the Vienna Basin Fields during the subsequent twelve-month
period. ADX confirms that it is not aware of any new information or data that may materially affect the Vienna Basin
Reserves.
ADX Vienna Basin Unaudited Developed Reserves as at 31 December 2023
Total Developed (BOE) @ 31 December 2022
Production 2023 (BOE)
Total Developed (BOE) @ 31 December 2023
1P Reserves
2P Reserves
1,059,965
1,719,965
80,874
80,874
979,091
1,639,091
Notes
1. ADX holds a 100% working interest in the fields
2. The notional reference point for reserves is the permit boundary or export line inlet.
3. Deterministic evaluation methods have been used.
4. Associate gas resources includes inerts sold with the gas.
5. There is no fuel & flare consumption for the Fields.
6. BOE means barrels of oil equivalent including solution gas
7. Conversion factors are 1.124m3/tonne oil, 165.4 sm3 gas per boe and a gas Higher Heating Value
of 40.7 MJ/sm3
Anshof Oil Discovery Area Appraisal and Development
The Anshof-3 exploration well located in the ADX-AT-II license in Upper Austria encountered oil in Eocene oil reservoirs in
2022 and an extended production test commenced on 16 October 2022 using a leased early production unit. The well
produced at a stable rate of approximately 110 barrels per day (gross) through the 2023 year until it was shut in on 19th
September 2023 after reaching the regulatory limit of 5,000 tonnes (36,000 barrels) for test production. Production during
the period was curtailed due to facilities constraints. Anshof-3 production is expected to recommence after the installation
and commissioning of a permanent production facility in late March 2024/early April 2024.
Anshof Permanent Production Facility; currently being moved from Ampfing to Anshof
- 12 -
ADX ENERGY LTD
OPERATIONS REPORT
Anshof-3 production performance exceeded expectations throughout the test in 2023 with strong pressure support and
deliverability. Water-free 33° API crude oil production has been maintained since October 2022 and the crude oil quality
continues to meet all the required specifications of the transporter and the buyer (OMV-refinery near Vienna).
The Anshof-2 well was drilled in the fourth quarter 2023. The well intersected the predicted Eocene oil reservoir section
at a depth of approximately 2160 metres measured depth (MD), approximately 60 metres shallower than prognosis in
terms of vertical depth but with no movable oil. Remapping of the field extent incorporating these results is underway.
Anshof Field Area and Anshof-2 Well Participation and Operatorship
ADX and MND executed an Energy Investment Agreement on 04th August 2023 (“Anshof EIA”) whereby MND earned 30%
interest in the Anshof Field Area from ADX. Under the terms of the Anshof EIA, MND will make payments to ADX VIE GmbH
of EUR 1,335,000 for back costs and EUR 597,353 for Anshof-1 and Anshof-2 well long lead items. The total firm and
contingent investment payment obligations by MND are up to EUR 11,520,000 to earn a 30% economic interest in the
Anshof Field Area (Refer to the ASX release dated 7 August 2023). ADX’ economic interest in the Anshof Field Area reduced
from 80% to 50% as a result of this transaction.
XST elected not to participate in the Anshof-2 well. ADX and MND agreed to fund XST’s share of well costs on a 50:50 basis
and in turn obtain the right to 60% and 40% respectively of production from the well unless XST opts to buy back into the
well at a premium of 500% to well costs. XST retains its 20% economic interest in the remainder of the Anshof Field Area
(i.e. Anshof Field Area less the Anshof-2 well) with both ADX and MND’s economic interests remaining at 50% and 30%
respectively.
Anshof Production Licence Award
A production licence was awarded on 3 March 2023 by Austria’s Ministry of Finance to ADX VIE GmbH (ADX) for the Anshof
oil field. The licence became effective from 31 March 2023.The award of the production licence provides the regulatory
framework for development of the Anshof Field including the recommencement of production of Anshof and the further
development of the field.
Permanent Production Facilities Planning and Engineering
Procurement, planning and design work continued during the reporting period for the installation of permanent
production facilities (PPF) to replace the early production system used for the test of Anshof-3 which was shut in during
September 2023. The early production system limited oil production due to processing, storage and offloading for trucking
(of oil to train loading export facilities) constraints and was only designed to produce a single well. The PPF will have the
capacity to process oil from multiple wells with liquids production capacity of approximately 3,000 barrels of oil per day.
It will be mostly unmanned and operate 24 hours per day. Installation and commissioning of the PPF is planned for late
March 2024/early April 2024.
Production from the PPF will initially be trucked to a nearby train loading facility as has been the case with the Anshof-3
well. In the longer term it is intended to construct new production pipelines to nearby export facilities less than 4km from
the Anshof-3 location.
Anshof-2 Appraisal Well
The Anshof-2 downdip appraisal well was successfully drilled during the quarter to a total measured depth of 2321 metres
(TMD) with a final inclination of approximately 73° (i.e. near horizontal). The well was spudded at 10:00 am Central
European Time (CET) on the 13th of November 2023 and the RED Drilling & Services GmbH (RED) E-202 drilling rig was
released on the 12th of December 2023 following completion of suspension operations. Anshof-2 was drilled without any
lost time safety incidents and within budget.
- 13 -
ADX ENERGY LTD
OPERATIONS REPORT
Anshof-2 Drilling with the RED E-202 drilling rig
The well intersected the predicted Eocene oil reservoir section at a depth of approximately 2160 metres measured depth
(MD), approximately 60 metres shallower than prognosis in terms of vertical depth.
The Eocene sands confirm at least 12 metres net vertical thickness of high quality reservoir with an average porosity of
15% and a maximum porosity of 20%, significantly better than the reservoir quality and thickness found in the Anshof-3
discovery well.
Although there is oil saturation interpreted from logs across the interval there is no evidence of moveable oil. Based on
the log analysis the well intersected the Eocene below the field oil-water-contact (OWC). The well was plugged back with
cement and suspended at the 9 5/8” casing shoe for deviation to a yet to be finalised up-dip location.
The presence of a thick high-quality reservoir section was in line with ADX’ P10 (upside) case pre drill maps and the fact
that Anshof oil field structure is flatter and larger due to the Eocene sands being encountered some 60 metres higher than
prognosis. Remapping is underway and is expected to result in increased oil volumes for the expected OWC.
ADX will review the depth conversion, fault mapping and seal integrity as part of its review and assessment for the best
follow-up well as an Anshof oil producer. This will also include a critical review of the potential field OWC depth to be
between the ODT seen in Anshof-3 and the water-up-to (WUT) seen in Anshof-2.
Anshof Field Reserves
Independent consultants RISC Advisory Pty Ltd (RISC) were engaged to provide an independent reserve and resource
assessment for the Anshof field. The competent person’s report prepared by RISC (CPR) has an effective date of 1 October
2022. Refer to ASX release dated 31 October 2022.
Since that time, the Anshof-3 extended test has produced water-free approximately 36,000 barrels at rates and pressures
higher than expected by RISC. The Anshof-2 well has also been drilled and the presence of a much thicker than expected
high-quality reservoir section and the fact that Anshof oil field structure is flatter and may be larger due to the Eocene
sands being encountered 60 metres higher than prognosis is expected to compensate for the shallower than expected
OWC depth at Anshof-2. As a result, a larger crestal volume with greater reservoir thickness can be expected requiring
fewer production wells due to higher well productivities and reserves recovery per well.
ADX plans to integrate these results and provide an update in relation to the Anshof Field Reserves as soon as the relevant
work has been completed .
The following table summarises the unaudited estimates of gross Developed Reserves as at 31 December 2023, based on
unaudited reserves reported as at 31 December 2022, less production from the Anshof-3 during the subsequent twelve-
month period.
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ADX ENERGY LTD
OPERATIONS REPORT
Anshof Unaudited Reserves (Gross) as at 31 December 2023
Anshof Gross Reserves (BOE) @ 31 December 2022
Production 2023 (BOE)
Anshof Gross Reserves (BOE) @ 31 December 2023
1P Reserves
2P Reserves
493,518
29,685
463,833
5,118,518
29,685
5,088,833
Notes
1. The notional reference point for reserves is the permit boundary or export line inlet.
2. ADX has an 50% economic interest in the Anshof discovery area and 50% entitlement to its gross reserves
and resources; except the Anshof-2 well where it has a 60% economic interest and entitlement subject to the
terms of XST’s non-participation in the well.
3. Probabilistic methods have been used to determine oil in place and recoverable oil. Deterministic methods
were used to develop production profiles and well numbers.
4. Associated gas resources include inerts sold with the gas. There is no fuel and flare.
5. Conversion factors are 7.3 bbl per tonne of oil and 5,800 MMscf per MMboe of gas.
6. ADX confirms that the results of the Anshof-2 well will impact Anshof Field Reserves estimates. As described
in its announcement of 11 December 2023, the presence of a much thicker than expected high-quality reservoir
section and the fact that Anshof oil field structure is flatter and larger due to the Eocene sands being
encountered 60 metres higher than prognosis is expected to compensate for the shallower than expected OWC
depth at Anshof-2. As a result, a larger crestal volume with greater reservoir thickness may be present requiring
fewer production wells due to higher well productivities and reserves recovery per well.
Table 1: Anshof Field Reserves and Resources
A. Proved Reserves are those quantities of Petroleum that, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be commercially recoverable from known reservoirs and under defined technical
and commercial conditions. If deterministic methods are used, the term “reasonable certainty” is intended to express a high
degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90%
probability that the quantities actually recovered will equal or exceed the estimate.
B. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less
likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that
actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable
Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the
actual quantities recovered will equal or exceed the 2P estimate.
- 15 -
ADX ENERGY LTD
OPERATIONS REPORT
UPPER AUSTRIA EXPLORATION LICENSES, MOLASSE BASIN – ONSHORE AUSTRIA
Welchau Giant Gas Exploration Well
ADX is operator and holds a 75% interest in the Welchau Investment Area subsequent to completion of MCF’s funding
obligations.
During the period, ADX executed an Energy Investment Agreement with MCF Energy Ltd via its subsidiary MCF Energy
GmbH (MCF) to fund 50% of the Welchau-1 well costs up to a well cost cap of EUR 5.1 million to earn a 25% economic
interest in the Welchau Investment Area. Upon completion of MCF’s funding obligations ADX will hold a 75% economic
interest in the Welchau Investment Area.
The Welchau gas prospect has exceptional gas resource potential, located in the heart of Europe at a relatively shallow
drill depth and proximal to gas pipelines. Pre-drill, ADX estimated that Welchau had best technical Prospective Resources
of 807 BCFE (134 MMBOE)1 at a reporting date of 22 June 2023. The Welchau prospect targeted the same reservoirs as the
nearby Molln-1 well which tested gas in 1989.
Map showing ADX-AT-II license area and the Welchau-1 drilling location in the Northern Calcareous Alps
During the period, ADX achieved all the necessary milestones to be prepared for drilling in early 2024. These included:
Securing a drilling permit from the Mining Authority;
Securing and Environmental Clearance from the Department of Nature Protection of the State Government of Upper
Austria;
Contracted all drilling and associated services including the RED Drilling & Services GmbH E-202 drilling rig; and
Commenced Well site construction.
1 Prospective Resources are those estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk
of discovery and a risk of development. Further explorations appraisal and evaluation is required to determine the existence
of a significant quantity of potentially moveable hydrocarbons.
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ADX ENERGY LTD
OPERATIONS REPORT
Subsequent to the year-end, the Welchau-1 gas exploration well was spudded on 24th February 2024. Well site construction
was completed and rig mobilisation occurred in January 2024. The well reached a total depth of 1733 metres on 17th March
2024. Welchau-1 was drilled without any lost time safety incidents and below budget due to improved drill rates and
efficiencies.
Strong liquids-rich gas shows were encountered over a 115-metre interval in the Steinalm Formation between 1452 and
1567 metres. A 7-metre core was recovered from 1511 metres to 1519 metres MD in the Steinalm Formation to gather
information on the rock properties (lithology and mineralogy, stratigraphy, petrophysical properties) and to have a
calibration section for log interpretation. The cut surfaces of the core confirmed the presence of a natural fracture system
which is essential for gas production performance with an intense, light blue petroleum fluorescence evident on the
fracture surfaces when viewed under ultra violet light. An image of the cut section of recovered core is shown below.
Cut section of Welchau-1 core demonstrating its natural fracture system
The logging of Welchau-1 confirmed open fracture networks and vuggy porosity essential for well productivity coincident
with high gas shows (up to 20%) seen during drilling.
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ADX ENERGY LTD
OPERATIONS REPORT
Left: The Welchau-1 mudlog with several distinct gas peaks in the area from 1490 to 1550 m MD. The zone of the
highest gas peak (> 8%) can clearly be identified on the image log (top right) where large vugs (dark coloured due to
conductive mud entering the formation) are present. Bottom right: A piece of rock recovered during coring, which
shows intense, light blue fluorescence on naturally occurring fractures.
Five pressure recordings from the interval 1479 metres to 1597 metres MD revealed a complex carbonate reservoir setting
in an over pressurised hydraulic system at an equivalent formation density of 1.28 SG. The corresponding permeability of
the pressure tested levels show medium to very high permeability which is in agreement with fracture density and
petrophysical log interpretation.
Liquid hydrocarbon and gas inflow to the wellbore was observed at surface following downhole sampling operations. High
mud gas readings for C1 of up to 20% were recorded from the well bore with heavier components up to C5 recorded.
Following the observation of gas seen at surface, liquid hydrocarbons were also observed in the mud at surface exhibiting
florescence. The inflow of hydrocarbons to the well bore is further confirmation of the existence of mobile hydrocarbons.
Future well operations include the casing, cementing and suspension of the well for later production testing, followed by
rig down and demobilisation of the RED E200 drill rig. The future testing and potential deepening of the well can be done
with a cost-effective workover rig.
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ADX ENERGY LTD
OPERATIONS REPORT
Upper Austria AGS Exploration Licences, Molasse Basin – Onshore Austria
ADX is operator and holds a 100% interest in the ADX-AT-I and ADX-AT-II exploration licences other than the Anshof
Discovery Area (above), the Welchau Farmout area (above) and the ADX-AT-I Investment Area (below).
ADX holds licence areas for exploration, production and gas storage with a total area of 1,022 km2 in the Molasse basin in
Upper Austria. During the first half year of 2023, ADX has added major potential to the Company’s portfolio in the licences
by de-risking existing prospects and identifying and maturing new exploration and appraisal prospects based on leading
edge 3D seismic and artificial intelligence (AI) applications.
ADX-AT-I and ADX-AT-II Licence Areas
During the period, ADX focussed on the giant Welchau gas prospect and the low-risk shallow gas portfolio in the ADX-AT-I
licence such as the combined HOCH and GAST and SCHOE prospects shown below in the exploration prospect inventory
table reported on 22 June 2023. The map above shows the location of the three above mentioned prospects in the northern
part of ADX AT-I.
The Low-Risk Shallow Gas Portfolio was significantly boosted by the maturation of mainly stratigraphic prospects with the
systematic application of AI software and the contribution of international experts on sequence stratigraphic traps. So far,
all prospects have a strong AVO (Amplitude Versus Offset) 3D seismic signature, indicating presence of gas reservoirs and
hence further contributing to the reduction of the pre-drill risk. All prospects share the following highly favourable and
important attributes:
A. Shallow drill depths from 800 to 2000 metres and hence low-cost drilling;
B. Highly productive proven reservoirs known from offset wellbores; and
C. Short tie-in distances to the extensive Upper Austrian gas network.
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ADX ENERGY LTD
OPERATIONS REPORT
Prospective Resources reported 22 June 2023
A detailed review of the HOCH and GAST prospects has revealed that they could be two connected parts of the same much
larger combined accumulation adding significantly to the resource potential. The subsequent estimated technical
prospective resources are shown in the table below.
Prospective resources estimates of the combined HOCH and GAST prospect
Prospective Resources are those estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk
of discovery and a risk of development. Further explorations appraisal and evaluation is required to determine the
existence of a significant quantity of potentially moveable hydrocarbons.
- 20 -
ADX ENERGY LTD
OPERATIONS REPORT
ADX-AT-I Investment Area
ADX is operator and holds a 50% interest in the ADX-AT-1 Investment Area subject to MND completing its funding
obligations.
During the period, ADX finalised agreements with MND Austria a.s. (MND) for MND to fund a gas exploration program in
ADX-AT-I. The transaction was announced on the 4th of December 2023 and received confirmation of acceptance of the
MND Investment Area partnership documentation by the Austrian Ministry of Finance. The transaction subsequently
reached completion on the 5th of January 2024. MND a.s., the parent of MND, is a highly credentialled European explorer,
producer and oil services group that generated approx. EUR 8.5 billion of revenue in 2022.
MND will secure a 50% economic interest in the Exploration Investment Area by providing cash payments of EUR 0.45
million to ADX and funding 100% of an agreed exploration work program of EUR 4.5 million. The Exploration Investment
Area is part of the ADX-AT-I licence area.
At completion (January 2024) MND paid back costs of EUR 0.45 million to ADX and will fund EUR 4.5 million for exploration
drilling to earn a 50% economic interest in MND Investment Area (an exploration investment area within the ADX-AT-I
license), in Upper Austria. ADX retained a 100% interest in the remainder of the ADX-AT-I licence including adjacent gas
exploration prospects (e.g. OHO and ZAM). The MND Investment Area is shown in the map below.
Map showing the MND Investment Area within the ADX-AT-I licence which includes the LICHT and IRR gas exploration
prospects
Several gas prospects, all mapped using 3D seismic, are available for drilling in the MND Investment Area. ADX and MND
currently intend to drill either the LICHT or the IRR gas exploration prospect during the second half of 2024. The LICHT
prospect location has already received a drilling permit including an environmental clearance and ADX continues to work
on securing drilling and environmental approvals for IRR. The prevailing strong gas pricing in Austria and proximity to
infrastructure means that success with even a modest sized gas discovery can be highly value adding and profitable for the
Company.
Both prospects offer significant resource potential and are fully covered by high quality 3D seismic and supported by
seismically generated direct hydrocarbon indicator responses. ADX and MND plan to select the first drilling prospect early
in 2024 with a view to drilling during the second half of 2024.
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ADX ENERGY LTD
OPERATIONS REPORT
The IRR prospect is featured in the Prospect Summary below. It shows the large (stratigraphic) resources upside potential
and the strong analogy with a close by gas field that has produced approximately 155 BCF of gas during its field life prior
to conversion to a large gas storage facility.
Prospective Resources are those estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk
of discovery and a risk of development. Further explorations appraisal and evaluation is required to determine the
existence of a significant quantity of potentially moveable hydrocarbons.
IECEA MARE PRODUCTION LICENSE AND PARTA EXPLORATION LICENSE – ONSHORE WESTERN ROMANIA
Parta Exploration Licence – Onshore Western Romania
ADX holds a 49.2% shareholding in Danube Petroleum Limited (Danube). The remaining shareholding in Danube is held
by Reabold Resources Plc. Danube via its wholly owned subsidiary, ADX Energy Panonia srl, holds a 100% interest in the
Parta Exploration licence (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the
Iecea Mare Production licence. ADX is the operator of the permit pursuant to a services agreement with Danube.
During the reporting period, ADX has submitted technical and financial documents in relation to the Parta Exploration
Licence to the relevant Romanian authorities following several positive meetings with the governing authority for the
possible extension of the current licence period. The governing authority is the National Agency for Mineral Resources
(NAMR) which is supporting the extension which can be granted through a government process. The validity of the Iecea
Mare production licence is 20 years and not affected.
ADX continues to be engaged in ongoing discussions with the Regulatory Authorities in this regard and ADX has delivered a
number of requested reports in support of the extension discussions, including reports specifically documenting the
extensive past activity with the objective of receiving a de facto waiver on the fulfilment of the obligatory work program.
Options to exploit the geothermal potential of the Romanian part of the Pannonian Basin are under investigation with the
authorities in combination with a subsurface review of the likely prospectivity.
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ADX ENERGY LTD
OPERATIONS REPORT
Italy - d 363C.R-.AX Licence - Offshore Sicily
ADX is operator and holds 100% interest in the d 363C.R-.AX Exploration Permit
In February 2019, the Italian government suspended exploration activities in onshore and offshore licenses to determine
suitability for sustainable hydrocarbon prospecting, exploration and development activities (refer ASX Announcement dated
4 February 2019). In May 2022, Italian licensing authorities offered ADX the opportunity to ratify the d363C.R-.AX licence
under a number of conditions including that only the gas potential within the licence is commercially exploited. Pleasingly,
the technical work undertaken by ADX has highlighted the excellent shallow gas prospectivity of the shallow water licence.
The total best technical prospective resource potential of five high graded prospects is 369 BCF (refer ASX announcement
30 August 2022). The five high graded prospects are considered as relatively low risk, simple 4-way dip anticline closures
featuring a seismic amplitude response commonly known as DHIs (or Direct Hydrocarbon Indicators).
The table below summarises the above-mentioned prospects that are defined by existing 2D seismic.
Based on initial discussions with the Italian authorities, ADX submitted a work program in 2022 committing to seismic
reprocessing and the option to acquire 2D seismic and 3D seismic data. Since none of the gas prospects and other identified
leads have been covered with 3D seismic to date, ADX expects that more prospects may be identified, including large
stratigraphic traps as indicated by the existing 2D seismic. It is expected that 3D seismic would substantially reduce
exploration risk and attract further investment through farmouts. At the end of 4 years after licence ratification, ADX could
elect to drill a well or drop the licence.
During the reporting period, ADX has at the request of the Ministry (Ministero dell’Ambiente e della Sicurezza Energetica)
submitted several documents in relation to the excellent gas exploration potential of the licence and in relation to ADX’
technical and financial capability. ADX received a principally positive reply from the Ministry in mid-July 2023 subject to
further submissions.
ADX is currently awaiting ministerial response following the submission of several technical, commercial and financial
capability documents for the award of a gas exploration and exploitation license. ADX has been informed by the Italian
ministry during the quarter that the documents are currently under a final review by an independent group of experts
outside of the Ministry.
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ADX ENERGY LTD
OPERATIONS REPORT
EXPLORATION AND PRODUCTION FARM-OUT ACTIVITIES
During the period, ADX has had success with multiple farmout transactions during the period including with MCF Energy Ltd.
in relation to Welchau, the MND Anshof Investment Agreement and another Investment Agreement for MND to fund a gas
exploration program in ADX AT-I.
ADX has been engaged in further on-going discussions with multiple parties to fund additional exploration and appraisal
programs in Upper Austria. This has resulted in in a number of farm-in proposals currently under discussion and further
prospect generation to attract further investment in the extensive ADX exploration portfolio. The Participation Framework
Agreements developed by ADX and approved by the Ministry (for the Anshof transaction) can be readily used as a template
for future farm-in and co-investment transactions.
NEW VENTURE E&P ACTIVITIES
Subject to ADX’ current focus on the Welchau discovery evaluation and operations, ADX continues to evaluate
complementary production, appraisal and exploration opportunities located onshore Europe where it has geotechnical and
operational experience. Priority opportunity is given to projects where there are significant synergies with the Company’s
current portfolio and operations.
During the reporting period, ADX has successfully participated in the evaluation and offer process for a highly
complementary production, appraisal and exploration opportunity for an onshore Europe opportunity. As one of the
preferred bidders ADX will continue to further evaluate the opportunity which would have significant synergies with the
Company’s current portfolio and operations.
ADX RENEWABLE ENERGY PROJECT FORMATION
Electricity remains ADX’ highest operating expense at the Vienna Basin Fields. Despite the re-balancing in the European
electricity market over the past 12 months, wholesale electricity prices in Austria remained elevated throughout 2023
trading at a significant premium to historical average prices (prior to the invasion of Ukraine by Russia in February 2022) and
look set to remain high according to the futures market.
It is ADX’ long-term plan to make the Vienna Basin Fields a multi-energy hub combining low emissions oil and gas production
operations, renewable energy production and hydrogen storage activities.
During the period, ADX has also undertaken a feasibility review of the GMU geothermal project which is feasible and
potentially commercially attractive due to increased energy prices. The combination of oil and gas targets overlying a
potential geothermal target reduces risk. We are seeking a partner in this project.
ADX remains committed to these projects in the longer term, however, due to capital and skills constraints during the period,
ADX has prioritised oil and gas activities at a time when Europe and particularly Austria are seeking domestic sources of
energy supply.
VIENNA BASIN HYDROGEN PRODUCTION AND STORAGE PROJECT
Work undertaken on the Vienna Basin Solar Project over the Period has demonstrated that there are strong synergies for
the Vienna Basin Hydrogen Project. These include the creation of a monetisation route for green electricity due to grid
injection limitations and having access to a cost-effective feedstock allowing the production of premium green hydrogen
compliant with standards applicable to the mobility sector.
ADX has therefore commenced during the period the evaluation of a green hydrogen early production scheme (Green
Hydrogen EPS) using a small-scale electrolyser with a capacity of ≤ 250 kW. The Green Hydrogen EPS would allow ADX to
produce green hydrogen using as feedstock electricity generated from the Vienna Basin Solar Project and generate early
revenues focusing on the mobility sector (which attracts higher prices due to product scarcity).
The next phases of the Vienna Basin Hydrogen Project would remain as follows:
a pilot phase with a 2.5 MW electrolyser capacity able to produce approx. 370 tonnes of renewable hydrogen; and
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ADX ENERGY LTD
OPERATIONS REPORT
a scaleup phase whereby the electrolyser capacity will be upgraded to 30 MW resulting in a renewable hydrogen
production capacity of 5,200 tonnes per annum.
Timing of the Vienna Basin Hydrogen Project implementation is dependent on the upgrade of the electricity grid to be able
to access sufficient renewable electricity to feed larger size electrolysers.
ADX is also awaiting further regulatory advances in relation to renewable gases which will provide more offtake certainty
required for project expansion. Austria has committed to achieve climate neutrality by 2040 (as opposed to 2050 for the
European Union) and is considering the introduction of a mandatory quota for renewable gases (similar to mandatory
blending of biofuels in gasoline and diesel). If implemented, such regulation would provide a strong legal and commercial
framework for renewable hydrogen production.
VIENNA BASIN SOLAR PROJECT
ADX undertook during the Period further evaluation of various photovoltaic (PV) plant configurations for the Vienna Basin
Solar Project taking into consideration that electricity injection into the local grid is limited to up to 300 kWh per connection
point.
The implementation of the Vienna Basin Solar Project would allow ADX to become a renewable energy producer within 12-
15 months from final investment decision. Initially, the most attractive configuration is a solar plant with a capacity of 1
MWp at the Gaiselberg site (combined with battery storage) and solar plant with a capacity of 0.35 MWh at the Gösting site.
The capacity of the solar plant at the Gaiselberg site could be upgraded to 2.5 MWp over time to provide more feedstock
for the Vienna Basin Hydrogen Project.
Potential layout of the PV panels at the Gaiselberg site (approx. 1 MWp)
These solar plant configurations could provide cost-effective electricity supply for the Vienna Basin Hydrogen Project with
an all-in cost estimated at EUR 40-65 per MWh which is below current wholesale electricity prices in Austria.
- 25 -
ADX ENERGY LTD
OPERATIONS REPORT
OIL, GAS AND GEOTHERMAL MULTI-ENERGY PROJECT IN UPPER AUSTRIA
The GMU prospect located in the Eastern part of the ADX-AT-I exploration licence in Upper Austria (Molasse basin) was
highlighted, presented and discussed in detail in the ASX release on the 22 June 2023. It combines a geothermal opportunity
(fractured Jurassic limestone with 110°C reservoir temperature) and stacked overlying oil and gas targets defined on high
quality 3D seismic
The GMU prospect provides the combination geothermal potential representing 18 MW of thermal power together with
overlying oil and gas potential. The combination of geothermal and hydrocarbon potential is increasingly attractive due to
increasing energy prices and increasing local industry demand seeking sustainable long term alternatives to expensive oil,
gas and electricity.
Summary of combined Geothermal and oil & gas potential at GMU, located in the Eastern part of the ADX-AT-I licence
- 26 -
ADX ENERGY LTD
RESERVES REPORT
RESERVES REPORT
Gaiselberg and Zistersdorf Production Assets, Vienna Basin – Onshore Austria
ADX purchased the Vienna Basin Fields (Gaiselberg and Zistersdorf) in December 2019. Since then, the fields have been
producing oil and gas continuously and have been ADX’ primary source of cash flow.
ADX equity interest in the relevant production licenses is summarised as follows:
Since purchase of the fields, two Competent Person’s Reports (CPR) have been undertaken by independent consultants
engaged by ADX to audit the Developed Reserves at the Vienna Basin Fields. The first CPR had an effective date of 31
December 2019 and the most recent CPR prepared by RISC has an effective date of 1 July 2021. The results of RISC’s CPR
were announced on the ASX on 4 November 2021.
ADX reserves attributable to Vienna Basin Fields effective 31 December 2022 were previously reported (Annual Report
2022). These were based on RISC CPR audited Developed Reserves as at 1 July 2021 less production during the subsequent
18-month period.
The following table summarises ADX’ unaudited estimates of Developed Reserves as at 31 December 2022, based on
reserves reported 31 December 2021, less production from the Vienna Basin Fields during the subsequent 12-month period.
ADX Vienna Basin Unaudited Developed Reserves as at 31 December 2023
Total Developed (BOE) @ 31 December 2022
Production 2023 (BOE)
Total Developed (BOE) @ 31 December 2023
1P Reserves
2P Reserves
1,059,965
1,719,965
80,874
80,874
979,091
1,639,091
Notes
1. ADX holds a 100% working interest in the fields
2. The notional reference point for reserves is the permit boundary or export line inlet.
3. Deterministic evaluation methods have been used.
4. Associate gas resources includes inerts sold with the gas.
5. There is no fuel & flare consumption for the Fields.
6. BOE means barrels of oil equivalent including solution gas
7. Conversion factors are 1.124m3/tonne oil, 165.4 sm3 gas per boe and a gas Higher Heating Value
of 40.7 MJ/sm3
- 27 -
FieldWorking InterestLicense Expiry 1Block or LicenseZistersdorf Field100%N/AZistersdorfGaiselberg Field100%N/AGaiselbergNote 1: License term for life of fieldADX Vienna Basin Oil and Gas Field Interests
ADX ENERGY LTD
RESERVES REPORT
Anshof Discovery Area, ADX AT-II AGS license, Upper Austria – Onshore Austria
During January 2022, ADX discovered oil in Eocene reservoirs and shallow gas in Miocene reservoirs at the Anshof-3 well.
ADX completed and tested the Eocene reservoir in May 2022. A long-term production test commenced from the Anshof-3
well on 16 October 2022. The well has produced water free oil averaging oil rates between 110-120 barrels per day
continuously for the entire test period until it was shutin 19 September 2023 at the end of the test period.
ADX equity interest in the relevant license is summarised as follows:
ADX Anshof Oil Field Interests
Area
Effective Dates
Anshof Field
Anshof Field
(except Anshof-2
Well)
Anshof-2 Well
31 December 2022 –
15 September 2023
16 September 2023 –
current
13 November 2023 -
current
Economic
Interest
80%1
50%1
60%2
Licence Expiry3
Block or Licence
N/A
N/A
N/A
ADX AT-II
ADX AT-II
ADX AT-II
Notes
1. ADX farmed down its 80% economic interest to MND in return for certain upfront and contingent payments
on 15 September 2023
2. XST elected not to participate in the Anshof-2 well resulting in ADX’ additional 10% economic interest in this
well
3. License Term is for life of field
Independent consultants RISC were engaged to provide an independent reserve and resource assessment for the Anshof
field. The RISC CPR relating to the Anshof field has an effective date of 1 October 2022. Refer to ASX release dated 31 October
2022. A long-term production test commenced from the Anshof-3 well on 16 October 2022. Since that time, the Anshof-3
extended test has produced water-free 36,000 barrels at rates and pressures higher than expected by RISC.
The Anshof-2 well has also been drilled and the presence of a much thicker than expected high-quality reservoir section and
the fact that Anshof oil field structure is flatter and larger due to the Eocene sands being encountered 60 metres higher than
prognosis is expected to compensate for the shallower than expected OWC depth at Anshof-2. As a result, current mapping
indicates a larger crestal volume with greater reservoir thickness can be expected requiring fewer production wells due to
higher well productivities and reserves recovery per well.
ADX plans to integrate these results and provide an update in relation to the Anshof Field Reserves as soon as practically
possible.
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ADX ENERGY LTD
RESERVES REPORT
The following table summarises the unaudited estimates of gross and net Reserves as at 31 December 2023, based on
unaudited reserves reported as at 31 December 2022, less production from the Vienna Basin Fields during the subsequent
twelve-month period.
ADX Anshof Unaudited Reserves as at 31 December 2023
Anshof Gross Reserves (BOE) @ 31 December 2022
Gross Production 2023 (BOE)
Anshof Gross Reserves (BOE) @ 31 December 2023
1P Reserves
2P Reserves
493,518
29,685
463,833
5,118,518
29,685
5,088,833
Anshof Net Reserves (BOE) @ 31 December 2022
Net Production 2023 (BOE)
Reduction in net economic interest under Energy Investment
Agreement
Anshof Net Reserves (BOE) @ 31 December 2023
394,814
23,748
4,094,814
23,748
139,150
231,916
1,526,650
2,544,416
Notes
1. The notional reference point for reserves is the permit boundary or export line inlet.
2. ADX has an 50% economic interest in the Anshof discovery area and 50% entitlement to its gross reserves
and resources; except the Anshof-2 well where it has a 60% economic interest and entitlement subject to the
terms of XST’s non-participation in the well.
3. Probabilistic methods have been used to determine oil in place and recoverable oil. Deterministic methods
were used to develop production profiles and well numbers.
4. Associated gas resources include inerts sold with the gas. There is no fuel and flare.
5. Conversion factors are 7.3 bbl per tonne of oil and 5,800 MMscf per MMboe of gas.
6. ADX confirms that the results of the Anshof-2 well will impact Anshof Field Reserves estimates. As described
in its announcement of 11 December 2023, the presence of a much thicker than expected high-quality
reservoir section and the fact that Anshof oil field structure is flatter and larger due to the Eocene sands being
encountered 60 metres higher than prognosis is expected to compensate for the shallower than expected
OWC depth at Anshof-2. As a result, a larger crestal volume with greater reservoir thickness is currently
mapped requiring fewer production wells due to higher well productivities and reserves recovery per well.
- 29 -
ADX ENERGY LTD
RESERVES REPORT
ADX’ Total Austrian Reserves
ADX’ total net Austrian Reserves are summarised below. This includes the Vienna Basin Fields Reserves and Anshof Field
Reserves (described above) as of 31 December 2022. The reserves variance is a comparison of 2021 year end reserves versus
2022 year end reserves.
The positive variance of 223% estimated for the 2P reserves category is the result of the reserves attributed to the Anshof
field discovered in January 2022 by the Anshof-3 well which was subsequently placed on long term test production in October
2022. A production license for the Anshof field was awarded in March 2023.
ADX Austrian Fields Unaudited Net Reserves as at 31 December 2023
Anshof Field and Vienna Basin Field Reserves (Barrels of Oil Equivalent)
Vienna Basin Fields (BOE) *
Anshof Field (BOE) #
Total Reserves (BOE) @ 31 December
2023
Notes
See Notes in Asset Tables above
1P Reserves
2P Reserves
979,091
1,639,091
231,916
2,544,416
1,211,007
4,183,503
Reporting Standards
Reserves and resources are reported in accordance with the definitions of reserves, contingent resources and prospective
resources and guidelines set out in the Petroleum Resources Management System (PRMS) prepared by the Oil and Gas
Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the American
Association of Petroleum Geologists (AAPG), World Petroleum Council (WPC), Society of Petroleum Evaluation Engineers
(SPEE), Society of Exploration Geophysicists (SEG), Society of Petrophysicists and Well Log Analysts (SPWLA) and European
Association of Geoscientists and Engineers (EAGE), revised June 2018.
PRMS Reserves Classifications Used
1P Denotes low estimate of Reserves (i.e., Proved Reserves). Equal to P1.
2P Denotes the best estimate of Reserves. The sum of Proved plus Probable Reserves.
3P Denotes high estimate of Reserves. The sum of Proved plus Probable plus Possible Reserves.
1. Developed Reserves are quantities expected to be recovered from existing wells and facilities.
a. Developed Producing Reserves are expected to be recovered from completion intervals that are open and
producing at the time of the estimate.
b. Developed Non-Producing Reserves include shut-in and behind-pipe reserves with minor costs to access.
2. Undeveloped Reserves are quantities expected to be recovered through future significant investments.
A. Proved Reserves are those quantities of Petroleum that, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be commercially recoverable from known reservoirs and under defined technical
and commercial conditions. If deterministic methods are used, the term “reasonable certainty” is intended to express a
high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least
a 90% probability that the quantities actually recovered will equal or exceed the estimate.
B. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less
likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely
that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable
Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the
actual quantities recovered will equal or exceed the 2P estimate.
C. Possible Reserves are those additional Reserves that analysis of geoscience and engineering data suggest are less likely
to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability
- 30 -
ADX ENERGY LTD
RESERVES REPORT
to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high-estimate scenario.
When probabilistic methods are used, there should be at least a 10% probability that the actual quantities recovered will
equal or exceed the 3P estimate. Possible Reserves that are located outside of the 2P area (not upside quantities to the 2P
scenario) may exist only when the commercial and technical maturity criteria have been met (that incorporate the possible
development scope). Standalone Possible Reserves must reference a commercial 2P project.
Persons compiling information about Hydrocarbons. Pursuant to the requirements of the ASX Listing Rule 5.31, 5.41 and
5.42 the unaudited technical and reserves information contained in this report has been prepared under the supervision of
Mr Paul Fink. Mr Fink is Technical Director of ADX Energy Limited, is a qualified geophysicist with 30 years of technical,
commercial and management experience in exploration for, appraisal and development of oil and gas resources. Mr. Fink
has consented to the inclusion of this information in the form and context in which it appears. Mr. Fink is a member of the
EAGE (European Association of Geoscientists & Engineers) and FIDIC (Federation of Consulting Engineers).
RISC independent audit and competent person reports
RISC has conducted an independent audit of the Developed Reserves for the Vienna basin Fields and a competent persons
report for Undeveloped Reserves for the Anshof Fields. The reserves described above are based on RISC’s assessments which
have been previously announced by ADX. RISC has previously consented to the inclusion of information specified as RISC
audited values in this report.
- 31 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Your Directors present their report for the year ended 31 December 2023.
DIRECTORS
The names and particulars of the Directors of the Company in office during the year and up to the date of this report were
as follows. Directors were in office for the entire year unless otherwise stated.
Ian Tchacos
B.Eng (Mech.)
Executive Chairman (Appointed 2 March 2010)
Mr Tchacos was appointed as Non-Executive Chairman of ADX on 2 March 2010 and appointed as Executive Chairman on
28 September 2015. He is a Petroleum Engineer with over 40 years international experience in corporate development
and strategy, mergers and acquisitions, petroleum exploration, development and production operations, commercial
negotiation, oil and gas marketing and energy finance. He has a proven management track record in a range of
international oil company environments. As Managing Director of Nexus Energy, he was responsible for this company’s
development from an onshore micro-cap explorer to an ASX top 200 offshore producer and operator.
Mr Tchacos is a recipient of the RIU Good Oil Conference John Doran Lifetime Achievement Award. The award is presented
annually to recognise an individual with an outstanding long-term record of achievement in the Australian oil and gas
industry.
Other directorships of listed companies in the last three years: 3D Oil Limited (current).
Paul Fink
MSc (Geophysics)
Executive Director (Appointed 25 February 2008)
Mr Fink has over 35 years of petroleum exploration and production industry experience in technical and management
positions. He is a graduate from the Mining University of Leoben, Austria and started his career as a seismic data processing
geophysicist and then worked predominantly on international exploration and development projects and assignments in
Austria, Libya, Bulgaria, UK, Australia and Pakistan as Exploration and Reservoir Manager for OMV. In 2005, Paul started
his own petroleum consultancy working on projects in Romania and as Vice President for Focus Energy, leading their highly
successful exploration and development campaign in Western India. Paul was a key team member for the resulting highly
successful IPO on the London Stock Exchange (Indus Gas) which led to a market capitalisation of over GBP 1.5 billion, partly
due to third party reserves audits managed by Paul.
Other directorships of listed companies in the last three years: Nil.
Edouard Etienvre
MSc (Management)
Non-Executive Director (Appointed 7 January 2020)
Mr Etienvre is an energy and natural resources executive and entrepreneur with over 15 years of experience in the oil and
gas, mining, shipping and offshore facilities sectors initially with banks including sell-side equity research and reserve-based
lending. More recently his experience has included positions with private and public E&P companies, ship owners and
offshore facilities owners, mining companies and a mid-size trading group managing investments in companies active in
the oil and gas sector. Mr Etienvre has extensive commercial, business development, risk assessment, management and
project management experience and expertise including deal sourcing, transaction structuring and execution, commercial
negotiations and financing including debt, equity, off-take finance, vendor finance and reverse take-overs.
Other directorships of listed companies in the last three years: Nil.
John Begg
BSc (Geol)
Non-Executive Director (Appointed 4 March 2024)
Mr Begg is a highly experienced energy professional who has been instrumental in the discovery and commercialisation of
numerous oil and gas fields in Australia, North Africa, SE Asia and California. During his career he has founded, promoted
and held executive roles in a number of companies listed in Australia and the UK. John brings valuable strategic, technical
and commercial support and guidance to the Board and management team. Like Mr Tchacos, Mr Begg has also been
- 32 -
ADX ENERGY LTD
DIRECTORS’ REPORT
awarded the RIU Good Oil Conference John Doran Lifetime Achievement Award (2018) for his outstanding long-term
record of achievement in the Australian oil and gas industry.
Other directorships of listed companies in the last three years: None.
Andrew Childs
BSc (Geology and Zoology)
Non-Executive Director (Appointed 11 November 2009. RESIGNED 4 March 2024)
Mr Childs graduated from the University of Otago, New Zealand in 1980 with a Bachelor of Science in Geology and Zoology.
Having started his professional career as an Exploration Geologist in the Eastern Goldfields of Western Australia, Mr Childs
moved to petroleum geology and geophysics with Perth based Ranger Oil Australia (later renamed Petroz NL). He gained
technical experience with Petroz as a Geoscientist and later commercial experience as the Commercial Assistant to the
Managing Director. Mr Childs is Chairman of Sacgasco Limited, Executive Chairman of Xstate Resources Limited and
Managing Director of Petroleum Ventures Pty Ltd.
Other directorships of listed companies in the last three years: Sacgasco Limited and Xstate Resources Limited (both
current).
COMPANY SECRETARIES
Peter Ironside B.Com, CA
Appointed 8 March 1995
Mr Ironside has a Bachelor of Commerce Degree and is a Chartered Accountant and business consultant with over 45
years’ experience in the exploration and mining industry. Mr Ironside has a significant level of accounting, financial
compliance and corporate governance experience including corporate initiatives and capital raisings. Mr Ironside has been
a Director and/or Company Secretary of several ASX listed companies including Integra Mining Limited and Extract
Resources Limited (before $2.18bn takeover) and is currently a non-executive director of E79 Gold Mines Limited and
Stavely Minerals Limited.
Amanda Sparks B.Bus, CA, F.Fin
Appointed 6 October 2015
Ms Amanda Sparks is a Chartered Accountant with over 35 years of resources related financial experience, with explorers
and producers. Ms Sparks has extensive experience in company secretarial, financial management, capital raisings,
corporate transactions, corporate governance and compliance for listed companies and is currently a non-executive
director and Company Secretary of Stavely Minerals Limited, a non-executive director of Godolphin Resources Limited
and Company Secretary for E79 Gold Mines Limited.
MEETINGS OF DIRECTORS
During the year, no formal board meetings were held. As the Board has two overseas directors, regular online
management meetings were held, and all important resolutions agreed via circular resolutions:
Name of Director
I Tchacos
P Fink
E Etienvre
A Childs
Circular Board
Resolutions
20
20
20
20
- 33 -
ADX ENERGY LTD
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS
The following table sets out each director’s relevant interest in shares and options in shares of the Company as at the date
of this report.
Shares
Ordinary fully paid shares
Options
Unlisted Options, Ex Price $Nil, Expiry 31/10/2024
Unlisted Options, Ex Price $0.16, Expiry 31/12/2024
Unlisted Options, Ex Price $Nil, Expiry 31/01/2025
Unlisted Options, Ex Price $Nil, Expiry 31/05/2025
Unlisted Options, Ex Price $Nil, Expiry 31/07/2025
Unlisted Options, Ex Price $Nil, Expiry 31/10/2025
Unlisted Options, Ex Price $Nil, Expiry 31/01/2026
Unlisted Options, Ex Price $0.17, Expiry 31/03/2026
Unlisted Options, Ex Price $Nil, Expiry 31/05/2026
Unlisted Options, Ex Price $Nil, Expiry 31/07/2026
Unlisted Options, Ex Price $Nil, Expiry 31/10/2026
Unlisted Options, Ex Price $Nil, Expiry 31/01/2027
Unlisted Options, Ex Price $Nil, Expiry 31/05/2027
Unlisted Options, Ex Price $Nil, Expiry 31/07/2027
Unlisted Options, Ex Price $Nil, Expiry 31/10/2027
Unlisted Options, Ex Price $Nil, Expiry 31/01/2028
Total Options
I Tchacos
P Fink
E Etienvre
J Begg
10,702,154
11,382,251
4,899,313
-
161,608
100,000
725,000
314,584
245,625
329,465
185,796
-
311,719
269,532
380,358
283,929
275,893
300,000
218,750
131,425
4,233,684
-
50,000
-
-
-
-
-
-
-
-
-
-
-
-
113,451
-
163,451
-
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
-
-
-
-
-
-
-
500,000
-
-
-
-
-
-
-
-
500,000
CORPORATE INFORMATION
Corporate Structure
ADX Energy Ltd is a limited liability company that is incorporated and domiciled in Australia. ADX Energy Ltd has prepared
a consolidated financial report incorporating the entities that it controlled during the year as follows:
-
ADX Energy Ltd
-
AuDAX Energy Srl
-
Bull Petroleum Pty Ltd
-
Terra Energy Limited
ADX VIE GmbH
-
Danube Petroleum Limited -
-
ADX Energy Panonia Srl
-
Kathari Energia Limited
-
Kathari Energia GmbH
parent entity
100% owned Italian controlled entity
100% owned Australian controlled entity (dormant)
100% owned UK controlled entity
Terra Energy Limited owns 100% of this Austrian controlled entity
49.18% owned UK controlled entity
Danube Petroleum Limited owns 100% of this Romanian controlled entity
100% owned UK controlled entity
Kathari Energia Limited owns 100% of this Austrian controlled entity
Principal Activity
The principal activities of the Group during the year were oil and gas production, appraisal and exploration.
Operations review
Refer to the Operations Review preceding this report.
- 34 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Summary of Financial Position, Asset Transactions and Corporate Activities
A summary of key financial indicators for the Group, with prior year comparison, is set out in the following table:
Cash and cash equivalents held at year end
Net profit/(loss) for the year after tax
Non-controlling interest in loss for the year
Included in loss for the year:
Operating revenue
Cost of sales – operating costs
Cost of sales – depreciation/amortisation
Restoration expenses – changes in abandonment provision
Dry well costs
Impairment expenses
Exploration expensed
Basic profit/(loss) per share from continuing operations
Net cash from/(used in) operating activities
Net cash from/(used in) investing activities
Net cash from/(used in) financing activities
Production in Austria was as follows:
Crude Oil Sold (Barrels)*
Gas Sold (Boe)
Total Oil Equivalent (Boe)
Consolidated
Consolidated
31 December 2023
31 December 2022
$
8,007,441
(4,209,715)
(145,506)
13,178,208
(9,309,549)
(2,281,358)
(970,159)
(1,638,550)
-
(1,787,750)
(1.12)
(2,916,480)
456,607
6,768,031
$
3,569,631
(2,437,874)
(133,611)
14,452,734
(7,451,979)
(2,351,874)
(888,944)
-
(817,122)
(2,105,903)
(0.72) cents
3,636,599
(4,829,609)
(1,189,792)
31 December 2023
102,614
31 December 2022
75,839
8,062
110,676
12,309
88,148
* Crude oil sold represents total gross production. This includes 29,801 crude oil barrels sold from the Anshof-3 well for
the year ended 31 December 2023 (2022: 6,483). Refer to note 25 of the financial statements for partnership details
for the Anshof-3 well.
- 35 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Funds from Farmouts and Partners
During the year, the following funds were received from partners:
- On 24 March 2023, ADX received EUR 228,460 (A$ 387,722) from MCF in accordance with the Energy Investment
Agreement dated 28 November 2022 as payment for past costs relating to the Welchau prospect and the Molln
appraisal opportunity.
- On 6 July 2023, EUR 58,972 (A$ 96,659) was received from MCF Energy Ltd. For study costs in relation to the
Welchau prospect.
- On 13 September 2023, a total of EUR 1,932,353 (A$ 3,167,272) for past costs and long lead drilling expenditures
was received from MND Austria a.s. (MND) to secure a 30% economic interest in the Anshof Field within the ADX-
AT-II licence in Upper Austria.
In November and December 2023, ADX received a total of EUR 1,550,268 (A$ 2,508,118) for Anshof-2 drilling
expenditures and permanent production facilities was received from MND Austria a.s. (MND).
-
Loan Repayments
During the year, $613,491 of bank loans were repaid in Austria (refer to note 12 of the financial statements).
Loan Notes
On 11 July 2023, ADX announced that it had secured A$1.5 million in loan note funding for the ongoing pre-investment in
equipment and services to drill up to 4 wells, as well as engineering and services for the installation of a permanent
production facility to replace an early production unit currently in operation at the Anshof-3 production well.
A total of 30 loan notes of A$ 50,000 each totalling A$ 1.5 million (Loan Notes) were issued to a small number of supportive
existing shareholders and new sophisticated investors. The terms for the Loan Notes are summarised as follows:
Face Value of Each Loan Note
Number of Loan Notes Issued
Total Loans aggregate amount
Loan Term
Interest Rate per annum (payable
quarterly in arrears)
Free Attaching Unlisted Options
with an Exercise Price of $0.1,
expiring 11 January 2025
Free Attaching Unlisted Options
with an Exercise Price of $0.14,
expiring 11 January 2025
* Post-consolidated amounts
Loan Note A
$50,000
20
$1,000,000
18 Months
(11 January 2025)
8%
150,000 Options
per Loan Note
(3,000,000 in Total)
150,000 Options
per Loan Note
(3,000,000 in Total)
Loan Note B
$50,000
10
$500,000
18 Months
(11 January 2025)
12%
-
Total Loan Notes
$50,000
30
$1,500,000
18 Months
(11 January 2025)
8-12%
Total of 3,000,000
Options*
215,000 Options
per Loan Note
Total of 5,150,000
Options*
(2,150,000 in Total)
Additional Hedging
On 27 July 2023, ADX executed further hedging transactions with Britannic Trading Limited (a trading entity of BP) with
the following additional derivative financial instruments:
Fixed price swaps for 15,810 barrels of oil at a fixed Brent crude oil price for August 2023 to December 2023 at USD
81.45 per barrel.
Subsequent to year end, on 26 January 2024, ADX executed further hedging transactions with Britannic Trading Limited
with a:
Fixed price swap contract for 8,400 barrels of oil at a fixed Brent crude oil price for February 2024 to May 2024
inclusive of USD 80.00 per barrel. The quantity of hedged oil equates to approximately 70 BOPD during that period.
- 36 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Consolidation of Capital
On 29 August 2023, ADX announced that a General Meeting would be held on Thursday 28 September 2023, to consolidate
the issued capital of the Company through the conversion of every ten (10) existing Shares into one (1) Share
(Consolidation).
ADX previously had long history (over 25 years) originating as a gold and base metal company before becoming an Energy
company. Consolidation was proposed by the Company in order to reduce the number of Shares on issue as the Board
considered it appropriate for ongoing growth with a capital structure that is more in line with ADX’ size, peer group
companies and the increasing European shareholder presence on the Company’s share register.
Upon receiving Shareholders approval, the capital consolidation was completed, with an effective date of 28 September
2023.
Placement Raising $ 4.8 million
In November 2023, ADX advised it had successfully raised $ 4.8 million from placements totalling 48,000,000 shares at a
price of $ 0.10 per share to sophisticated, institutional and professional investors. One (1) free attaching unlisted option
was issued for every two (2) Placement Shares. The exercise price of the Placement Options is $ 0.16 with an expiry date
of 31 December 2024.
The funds raised from the Placement and the Securities Purchase Plan will be applied to near term activities of the
Company, which included funding of the Company’s increased economic interest in the recently completed Anshof-2
Appraisal Well, the installation of permanent production facilities at Anshof to enable increased production from the
Anshof-3 and Anshof-2 Wells as well as funding for the Company’s share of the Welchau-1 Exploration Well.
Securities Purchase Plan (SPP) Raising $ 1.578 million
On 22 November 2023, eligible Shareholders (SPP Participants) were invited to participate in a Securities Purchase Plan
Offer at $ 0.10 per Share. This was the same price as the offer price under the Placement. SPP Participants also received
one free-attaching unquoted option to acquire a Share for every two SPP Shares issued. The SPP Options are exercisable
on the same terms as the Placement Options. A total of 15,780,000 SPP Shares and 7,640,000 SPP Options were issued on
22 December 2023, and the final 250,000 SPP Options were issued on 22 February 2024.
Unmarketable Parcel Share Sale Facility
On 24 February 2023, ADX announced that it has completed the unmarketable parcel share sale facility (Facility) for
shareholders who held less than A$ 500 worth of fully paid ordinary shares in the Company (Unmarketable Parcel), as
announced on ASX on 19 December 2022. Consideration totalled $193,541.56 ($0.00758712 per share, based on a pre-
consolidation basis).
DIVIDENDS
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
ENVIRONMENTAL ISSUES
The Company’s environmental obligations are regulated by the laws of the countries in which ADX has operations. The
Company has a policy to either meet or where possible, exceed its environmental obligations. No environmental breaches
have been notified by any governmental agency as at the date of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Company during the year are detailed in the Operations Report and Financial
Summary in this report.
FUTURE DEVELOPMENTS
The Company intends to continue its production operations in Austria and continue its’ exploration and development
programme on its existing permits, and to acquire further suitable permits for exploration and development. Additional
comments on likely developments are included in the Operations Report.
- 37 -
ADX ENERGY LTD
DIRECTORS’ REPORT
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total Options
Number
13,231,674
161,608
31,865,000
3,000,000
5,150,000
725,000
6,350,000
314,584
245,625
500,000
329,465
185,796
311,719
269,532
380,358
283,929
275,893
300,000
332,291
131,425
64,343,899
Exercise Price
13 cents
Nil cents
16 cents
10 cents
14 cents
Nil cents
17 cents
Nil cents
Nil cents
17 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Expiry Date
10/08/2024
31/10/2024
31/12/2024
11/01/2025
11/01/2025
31/01/2025
30/04/2025
31/05/2025
31/07/2025
31/03/2026
31/10/2025
31/01/2026
31/05/2026
31/07/2026
31/10/2026
31/01/2027
31/05/2027
31/07/2027
31/10/2027
31/01/2028
No option holder has any right under the options to participate in any other share issue of the Company or any other
related entity.
2,580,756 (pre-consolidation 25,707,560) unlisted options with an exercise price of nil were exercised by Directors during
the year.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company has paid a premium to insure the Directors and Officers of the Company and its controlled entities. Details of
the premium are subject to a confidentiality clause under the contract of insurance.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the group.
- 38 -
ADX ENERGY LTD
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the 2023 Remuneration Report, outlining key aspects of ADX’ remuneration policy and framework,
together with remuneration awarded this year.
The report is structured as follows:
A. Key management personnel (KMP) covered in this report
B. Remuneration policy, link to performance and elements of remuneration
C. Contractual arrangements of KMP remuneration
D. Remuneration awarded
E. Equity holdings and movement during the year
F. Other transactions with key management personnel
G. Use of remuneration consultants
H. Voting of shareholders at last year’s annual general meeting
A. KEY MANAGEMENT PERSONNEL COVERED IN THIS REPORT
For the purposes of this report key management personnel (KMP) of the Group are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly,
including any Director (whether Executive or otherwise).
Key Management Personnel during the Year
Directors
Ian Tchacos
Paul Fink
Edouard Etienvre
Andrew Childs
Other KMPs
Amanda Sparks
-
-
-
-
-
Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Company Secretary and Chief Financial Officer
B. REMUNERATION POLICY, LINK TO PERFORMANCE AND ELEMENTS OF REMUNERATION
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and
the creation of value for shareholders.
The Board ensures that executive reward satisfies the following key criteria for good reward corporate governance
practices:
Competitiveness and reasonableness;
Acceptability to shareholders;
Transparency; and
Capital management.
Remuneration Philosophy
The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company must
attract, motivate and retain highly skilled Directors and Executives.
To this end, the Company embodies the following principles in its remuneration framework:
provide competitive rewards to attract high calibre Executives; and
if required, establish appropriate, demanding performance hurdles in relation to variable Executive remuneration.
The Group has structured an executive framework that is market competitive and complementary to the reward strategy
for the organisation.
- 39 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Both Executive and Non-Executive Directors may elect, subject to Shareholder approval, to reduce their cash director fees
and consulting fees in lieu of Shares in accordance with the Company’s Directors’ Share Plan (Salary Sacrifice). The Shares
are issued on a quarterly basis according to the Directors’ fees owing to each of the Directors at that time, at an issue price
of no less than the volume weighted average sale price of Shares sold on ASX during the 90 days prior to the expiration of
the corresponding calendar quarter in which the Directors’ fees were incurred. The Executive Directors may also elect,
subject to Shareholder approval, to reduce their cash consulting fees in lieu of Options in accordance with the Company’s
Performance Rights and Option Plan. The Options are issued on a quarterly basis according to the consulting fees owing to
each of the Directors at that time, using a deemed price of no less than the volume weighted average sale price of Shares
sold on ASX during the 90 days prior to the expiration of the corresponding calendar quarter in which the consulting fees
were incurred.
Remuneration Committee
Due to the limited size of the Company and of its operations and financial affairs, the use of a separate remuneration
committee is not considered efficient for ADX. The Board has taken a view that the full Board will hold special meetings or
sessions as required. The Board are confident that this process for determining remuneration is stringent and full details
of remuneration policies and payments are provided to shareholders in the annual report and on the web. The Board has
adopted the following policies for Directors’ and executives’ remuneration.
Non-Executive directors’ remuneration
Non-executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to time.
Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act as
at the time of the Director’s retirement or termination. Non-executive Directors’ remuneration may include an incentive
portion consisting of options or similar instruments, as considered appropriate by the Board, which may be subject to
shareholder approval in accordance with ASX listing rules.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board considers the amount of Director fees being paid by comparable
companies with similar responsibilities and the experience of the Non-executive Directors when undertaking the annual
review process. Fees for Non-Executive directors are not linked to the performance of the Group.
Executive Remuneration
In determining the level and make-up of Executive remuneration, the Board negotiates a remuneration to reflect the
market salary for a position and individual of comparable responsibility and experience. Remuneration is compared with
the external market by reviewing industry salary surveys and during recruitment activities generally. If required, the Board
may engage an external consultant to provide independent advice in the form of a written report detailing market levels
of remuneration for comparable Executive roles.
Remuneration consists of a fixed remuneration and may include a long term incentive portion as considered appropriate.
Executives remuneration is currently a fixed consulting fee based on a daily rate for actual days worked.
Long term incentives granted to Executives are delivered in the form of options. The option incentives granted are aimed
to motivate Executives to pursue the long term growth and success of the Company within an appropriate control
framework and demonstrate a clear relationship between key Executive performance and remuneration. Director options
are granted at the discretion of the Board and approved by shareholders. Performance hurdles are not attached to vesting
periods; however the Board may determine appropriate vesting periods to provide rewards over a period of time to key
management personnel. During the year there were no performance related payments made.
C. CONTRACTUAL ARRANGEMENTS OF KMP REMUNERATION
On appointment to the board, all Non-Executive directors enter into a service agreement with the Company in the form of
a letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the office
of director. Non-Executive Directors are paid a fee of A$ 33,000 per annum, inclusive of any superannuation if applicable.
In accordance with the Company’s Directors’ Share Plan (Salary Sacrifice), part may be paid in cash, and part in shares.
- 40 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Remuneration and other terms of employment for the Executive Directors and the other key management personnel are
also formalised in consultancy agreements. The major provisions of the agreements relating to remuneration are set out
below.
Name
I Tchacos – Executive Chairman
– Technical Consultancy
I Tchacos – Executive Chairman
– Corporate Consultancy
Term of
agreement
Term of 2 years
commencing 1
July 2020.
Subsequently
monthly.
Ongoing
P Fink – Executive Director –
Consultancy with ADX Energy
Ltd
Term of 2 years
commencing 1
July 2020.
Subsequently
monthly.
P Fink – Executive Director –
Consultancy with ADX VIE
GmbH
E Etienvre – Non-Executive
Director – Consultancy with
ADX Energy Ltd
No written
agreement
Term of 2 years
commencing 1
July 2020.
Subsequently
monthly.
Amanda Sparks – Company
Secretary and Chief Financial
Officer
Ongoing
Base annual remuneration inclusive of
superannuation at 31/12/23
Technical consulting - $1,500 per day (cash)
Termination
benefit
2 months (up
to $18,000)
Corporate consulting - $500/month (cash)
plus options subject to Board and Shareholder
approval for additional work at a value of
$1,500 per day
2 months (up
to $18,000)
In addition, I Tchacos receives Directors fees
of $25,000 pa. 80% paid in cash, 20% paid in
equity (subject to Shareholder approval)
Retainer of $500 per month (cash) plus
consulting at $1,500 per day
(50% cash and 50% equity (options), subject to
shareholder approval)
Whilst P Fink is on a leave of absence due to an
illness, the Board has agreed to temporarily
increase the monthly retainer to $15,000.
In addition, P Fink receives Directors fees of
$25,000 pa. 80% paid in cash, 20% paid in
equity (subject to Shareholder approval). Whilst
P Fink is on a leave of absence due to an illness,
the Board has agreed to pay these directors
fees 100% in cash.
Consulting at EUR 900 per day
2 months (up
to $18,000)
None
Consulting at $1,500 per day
(50% cash and 50% equity (shares), subject to
shareholder approval)
1 month (up
to $7,500)
In addition, E Etienvre receives non-executive
Directors fees of $33,000 pa. 61% paid in cash,
39% paid in equity (subject to Shareholder
approval). E Etienvre also receives Director
fees from 49% owned subsidiary, Danube
Petroleum Limited of GBP 12,000 per annum
Monthly retainer of $3,200, 50% paid in cash
and 50% paid in equity. Additional hours
above 20 hours per month are paid in cash at
$160 per hour.
None
- 41 -
ADX ENERGY LTD
DIRECTORS’ REPORT
D. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Details of the remuneration of each Director and named executive officer of the Company, including their personally-related
entities, during the year was as follows:
2023
Directors
I Tchacos
P Fink
E Etienvre
A Childs
Other KMP
A Sparks
TOTAL 2023
Cash salary,
directors fees and
consulting fees,
including
accruals*
$
347,679
358,002
197,767
29,797
80,640
1,013,885
Post-Employment
Share Based
Share Based
Share Based
Superannuation
$
Shares (in lieu of
cash fees) (1)
$
Options (in lieu
of cash
consulting fees)
(1)
$
Options
(employee
incentive plan) (2)
$
3,009
-
-
3,203
10,221
16,433
3,750
3,750
124,617
-
14,400
146,517
60,000
37,828
-
-
-
97,828
Total
$
414,438
399,580
322,384
33,000
-
-
-
-
41,600
41,600
146,861
1,316,263
(1) Share based payments. These represent the amount expensed in the year for Shares and Options in lieu of cash consulting fees.
(2) Share based payments. These represent the amount expensed for options granted and vested in the year.
* Includes accruals of fees paid subsequent to year end via equity.
2022
Post-Employment
Share Based
Share Based
Cash salary,
directors fees and
consulting fees,
including accruals
$
Superannuation
$
Shares (in lieu of
cash fees)
$
Options (in lieu
of cash
consulting fees)
$
Directors
I Tchacos
P Fink
E Etienvre
A Childs
Other KMP
A Sparks
TOTAL 2022
318,743
345,221
228,564
29,932
62,680
985,140
2,952
-
-
3,143
8,093
14,188
3,750
3,750
74,677
-
14,400
96,577
73,125
51,609
-
-
-
124,734
Total
$
398,570
400,580
303,241
33,075
85,173
1,220,639
There were no performance related payments made during the year. Performance hurdles are not attached to
remuneration options.
- 42 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Share-based Compensation
Shares:
The Company’s Directors’ Share Plan (Salary Sacrifice), allows for shares to be issued on a quarterly basis according to the
Directors’ fees owing to each of the Directors at that time, at an issue price of no less than the volume weighted average
sale price of Shares sold on ASX during the 90 days prior to the expiration of the corresponding calendar quarter in which
the Directors’ fees were incurred. The shares are issued after Shareholder approval.
The following shares were granted as equity compensation benefits (in lieu of cash remuneration) to Directors during the
year.
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing Securities
into one (1) Security. All data below is based on post-consolidation data.
Date Issued
24/01/2023
26/05/2023
26/05/2023
21/08/2023
22/11/2023
Number of Shares
35,714
897,140
640,959
677,120
442,795
2,693,728
Value based on
90 Day VWAP $
2,500
62,800
44,867
47,398
39,852
197,417
In lieu of part remuneration for
the quarter ended
31/12/2022
2022 Year
31/03/2023
30/06/2023
30/09/2023
Issued Subsequent to Year End
02/02/2024
214,660
22,969
31/12/2023
Summarised as:
Director
Ian Tchacos
Paul Fink
Edouard Etienvre
Andrew Childs
Issued during the year
2023
Number of Shares
67,460
67,460
2,558,808
-
2,693,728
2023
$
5,000
5,000
187,417
-
197,417
The following shares were granted as equity compensation benefits (in lieu of cash remuneration) to other KMPs (Amanda
Sparks) during the year.
Date Issued
24/01/2023
26/05/2023
21/08/2023
22/11/2023
Number of Shares
68,571
68,571
68,571
53,333
259,046
Value based on
90 Day VWAP $
4,800
4,800
4,800
4,800
19,200
In lieu of part remuneration for
the quarter ended
31/12/2022
31/03/2023
30/06/2023
30/09/2023
Issued Subsequent to Year End
02/02/2024
44,859
4,800
31/12/2023
- 43 -
ADX ENERGY LTD
DIRECTORS’ REPORT
Options:
The Executive Directors may also elect, subject to Shareholder approval, to reduce their cash consulting fees in lieu of
Options in accordance with the Company’s Performance Rights and Option Plan. The Options are issued on a quarterly
basis according to the consulting fees owing to each of the Directors at that time, using a deemed price of no less than the
volume weighted average sale price of Shares sold on ASX during the 90 days prior to the expiration of the corresponding
calendar quarter in which the consulting fees were incurred.
The following options were granted as equity compensation benefits (in lieu of cash remuneration) to Directors during the
year. Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing
Securities into one (1) Security. All data below is based on post-consolidation data.
Date Issued
24/01/2023
26/05/2023
21/08/2023
22/11/2023
Number of Options
514,955
470,759
499,554
332,291
1,817,560
Value based on
90 Day VWAP $
36,047
32,953
34,969
29,906
133,875
In lieu of part remuneration for
the quarter ended
31/12/2022
31/03/2023
30/06/2023
30/09/2023
Issued Subsequent to Year End
02/02/2024
131,425
14,062
31/12/2023
Summarised as:
Director
Ian Tchacos
Paul Fink
2023
Number of Options
1,078,572
738,988
1,817,560
2023
$
79,875
54,000
133,875
During the year the following options were granted as equity compensation benefits to Key Management Personnel.
These options vested at grant date.
2023
Other KMP
A Sparks
Number of Options
Exercise price 17
cents,
expiry 30/04/2025
Value* per option
at grant date
$
1,000,000
0.0416
These options were granted under ADX’s Employee Incentive Plan.
* Value at grant date has been calculated in accordance with AASB 2 Share-based Payment. Stavely used a Black Scholes
option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and the expected volatility of the underlying share, the expected dividend yield and the risk-free interest
rate for the term of the option. Further details are in note 3 of the financial statements.
The inputs to the model used were:
Grant date
Spot price ($)
Exercise price ($)
Vesting date
Expiry date
Expected future volatility (%)
Risk-free rate (%)
Dividend yield (%)
Value Each ($)
21/11/2023
0.115
0.17
21/11/2023
30/04/2025
100
4.01
-
0.0416
- 44 -
ADX ENERGY LTD
DIRECTORS’ REPORT
No other options were granted as equity compensation benefits to Directors and other Key Management Personnel.
Shares issued to Key Management Personnel on exercise of compensation options
During the year to 31 December 2023, 2,580,757 compensation options (post-consolidation) were exercised by Directors
or other Key Management Personnel (2022: 23,250,146 pre-consolidation). A summary of options exercised by Directors
is as follows:
Ian Tchacos
Unlisted Options
Paul Fink
Unlisted Options
Total exercised
Number
Exercise Price
1,207,813
Nil cents
1,372,944
2,580,757
Nil cents
E. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing Securities
into one (1) Security. All data below is based on post-consolidation data.
(a) Shareholdings of Key Management Personnel
Balance at
beginning of
the year
Options
exercised
Granted as
remuneration
Share
Purchase Plan
Balance at
end of the
year
Directors
I Tchacos
P Fink
E Etienvre
A Childs
Other KMPs
A Sparks
8,865,199
1,207,813
9,841,847
1,372,944
2,037,527
2,538,852
3,298,873
-
-
-
67,460
67,460
2,558,808
-
200,000
10,340,472
100,000
11,382,251
100,000
100,000
4,696,335
2,638,852
259,046
300,000
3,857,919
26,582,298
2,580,757
2,952,774
800,000
32,915,829
(b) Option holdings of Key Management Personnel
Balance at
beginning of
the year
Granted as
remuneration
Share
Purchase Plan
Options
Loan Note
Options
Options
exercised
Balance at
end of the
year
Not
exercisable
Exercisable
Directors
I Tchacos
P Fink
E Etienvre
A Childs
Other KMPs
4,481,500
1,078,572
747,497
738,988
-
-
-
-
-
-
-
A Sparks
359,525
1,000,000
5,588,522
2,817,560
150,000
150,000
-
-
-
430,000
(1,207,813)
4,352,259
(1,372,944)
113,541
-
-
-
-
-
1,939,525
430,000
(2,580,757)
6,405,325
-
-
-
-
-
4,352,259
113,541
-
-
1,939,525
6,405,325
F. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
There were no other transactions with key management personnel during the year.
- 45 -
ADX ENERGY LTD
DIRECTORS’ REPORT
G. USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by ADX during the year.
H. VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
The Company received more than 99.5% of “yes” votes on its Remuneration Report for the 2022 year. The Company did
not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
END OF THE AUDITED REMUNERATION REPORT
SUBSEQUENT EVENTS
Equity Issues in Lieu of Remuneration
On 2 February 2024, ADX issued the following shares and options. These amounts were accrued in the 31 December 2023
financial statements:
a.
b.
c.
214,660 shares issued pursuant to ADX’ Directors’ Share Plan, approved by Shareholders on 12 May 2023. The shares
were issued to directors in consideration of remuneration elected to be paid in shares for the quarter ended 31
December 2022 ($22,969).
44,859 shares issued to ADX’s Company Secretaries and consultants in consideration of remuneration elected to be
paid in shares for the quarter ended 31 December 2023 ($4,800).
131,425 Options granted to Director Ian Tchacos, as approved by Shareholders on 12 May 2023. The options were
granted in consideration of consultancy fees remuneration elected to be paid in options for the quarter ended 31
December 2023 (value $14,062). The options have a nil exercise price and expire on 31 January 2028.
On 25 March 2024, 9,968,337 unlisted options were exercised raising $1,296,634.
There are no other matters or circumstances that have arisen since 31 December 2023 that have or may significantly affect
the operations, results, or state of affairs of the Group in future years.
CORPORATE GOVERNANCE
The Directors of the Company support and adhere to the principles of corporate governance, recognising the need for the
highest standard of corporate behaviour and accountability. Please refer to the Company’s website for details of corporate
governance policies:
http://adx-energy.com/en/investors/corporate-governance.php
AUDIT INDEPENDENCE AND NON-AUDIT SERVICES
Auditor’s independence - section 307C
The Auditor’s Independence Declaration is included on page 47 of this report.
Non-Audit Services
There were no non-audit services provided during the year.
Signed in accordance with a resolution of the Directors.
Ian Tchacos
Executive Chairman
Dated this 28th day of March 2024
- 46 -
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001
In.Corp Audit & Assurance Pty Ltd
ABN 14 129 769 151
To the directors of ADX Energy Ltd:
As lead auditor of the audit of ADX Energy Ltd for the year ended
31 December 2023, I declare that, to the best of my knowledge and
belief, there have been:
• no contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the audit; and
• no contraventions of any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of ADX Energy Ltd and the entities it
controlled during the year.
In.Corp Audit & Assurance Pty Ltd
Level 1
6-10 O’Connell Street
SYDNEY NSW 2000
Suite 11, Level 1
4 Ventnor Avenue
WEST PERTH WA 6005
GPO BOX 542
SYDNEY NSW 2001
T +61 2 8999 1199
E team@incorpadvisory.au
W incorpadvisory.au
Graham Webb
Director
28 March 2024
Liability limited by a scheme approved under Professional Standards Legislation
ADX ENERGY LTD
DIRECTORS’ DECLARATION
1.
In the opinion of the directors:
a) The financial statements and notes are in accordance with the Corporations Act 2001, including:
i)
giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its performance
for the year then ended; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
iii) complying with International Financial Reporting Standards (IFRS) as stated in note 1 of the financial
statements; and
b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the year ended 31 December 2023.
This declaration is signed in accordance with a resolution of the Board of Directors.
Ian Tchacos
Executive Chairman
Dated this 28th day of March 2024
- 48 -
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
ADX ENERGY LTD
Operating revenue
Cost of sales
Gross profit
Other income
Other Expenses:
Administration, staff and corporate expenses,
net of recoveries from projects (including share based payments)
Exploration expensed
Restoration expenses – changes in abandonment provision
Dry well costs
Impairment of wells
Finance costs
Loss on disposal of plant and equipment
Total other expenses
Loss before income tax
Income tax benefit/(expense)
LOSS AFTER INCOME TAX
Loss is attributable to:
Owners of ADX Energy Ltd
Non-Controlling Interest
Consolidated
Year ended
31 Dec 2023
$
13,178,208
(11,865,367)
1,312,841
Year ended
31 Dec 2022
$
14,452,734
(8,891,910)
5,560,824
Note
2
2
2
3,628,457
5,057
2
(4,895,548)
(3,598,107)
14
9
9
2
(1,787,750)
(2,105,903)
(970,159)
(881,944)
(1,638,550)
-
(244,439)
(4,418)
-
(817,122)
(210,437)
(1,211)
(9,540,864)
(7,614,724)
(4,599,566)
(2,048,843)
4
389,851
(389,031)
(4,209,715)
(2,437,874)
(4,064,209)
(145,506)
(2,304,263)
(133,611)
17
(4,209,715)
(2,437,874)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Hedge accounting
Income tax relating to items of other comprehensive income/(loss)
18
Other comprehensive income for the year, net of tax
240,499
-
-
240,499
139,731
107,389
-
247,120
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(3,969,216)
(2,190,754)
Total comprehensive income is attributable to:
Owners of ADX Energy Ltd
Non-Controlling Interest
(3,699,668)
(269,548)
(2,093,716)
(97,038)
(3,969,216)
(2,190,754)
Earnings per share for loss attributable to the ordinary equity
holders of the Company:
Basic loss per share
5
Cents Per
Share
(1.12)
Cents Per
Share
(0.72)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
- 49 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Consolidated
31 December
2023
$
31 December
2022
$
Note
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Other receivables
Oil and gas properties
Right of use assets
Deferred tax assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Lease liabilities – right of use assets
Current tax liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease liabilities – right of use assets
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
6
7
8
7
9
10
4
11
12
13
4
14
12
13
14
Equity
Issued capital
Reserves
Accumulated losses
Capital and reserves attributable to owners of ADX Energy Ltd
Non-controlling interests
15
16
17
Total Equity
8,007,441
3,421,979
2,255,367
13,684,787
3,569,631
2,090,945
883,199
6,543,775
1,104,192
25,145,587
1,209,783
1,490,803
1,137,797
23,675,687
239,640
1,066,393
28,950,365
26,119,517
42,635,152
32,663,292
5,136,865
609,394
105,644
-
241,701
6,093,604
2,336,041
592,336
130,761
233,807
347,640
3,640,585
1,403,067
1,110,752
18,286,204
592,336
156,025
15,875,114
20,800,023
16,623,475
26,893,627
20,264,060
15,741,525
12,399,232
90,503,290
5,399,490
(88,273,347)
7,629,433
8,112,092
84,105,646
4,121,084
(84,209,138)
4,017,592
8,381,640
15,741,525
12,399,232
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
- 50 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Non-
controlling
Interest
Total
Equity
$
At 1 January 2022
81,435,632
3,675,722
(81,904,875)
8,478,678
11,685,157
Loss for the year
Other comprehensive income
Total comprehensive income for the year, net of
tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
-
-
-
-
(2,304,263)
(133,611)
(2,437,874)
210,547
-
36,573
247,120
210,547
(2,304,263)
(97,038)
(2,190,754)
2,911,133
(241,119)
-
-
-
234,815
2,670,014
234,815
-
-
-
-
-
-
-
-
2,911,133
(241,119)
234,815
2,904,829
As at 31 December 2022
84,105,646
4,121,084
(84,209,138)
8,381,640
12,399,232
At 1 January 2023
84,105,646
4,121,084
(84,209,138)
8,381,640
12,399,232
Loss for the year
Other comprehensive income
Total comprehensive income for the year, net of
tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments – options and performance
rights
-
-
-
-
(4,064,209)
(145,506)
(4,209,715)
364,541
-
(124,042)
240,499
364,541
(4,064,209)
(269,548)
(3,969,216)
6,714,188
(316,544)
-
-
-
913,865
6,397,644
913,865
-
-
-
-
-
-
-
-
6,714,188
(316,544)
913,865
7,311,509
As at 31 December 2023
90,503,290
5,399,490
(88,273,347)
8,112,092
15,741,525
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
- 51 -
ADX ENERGY LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Receipts in the ordinary course of activities
Payments to suppliers and employees, including for
exploration expensed
Government subsidies received
Interest received
Interest paid
Income taxes paid
Consolidated
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
Note
14,674,462
15,385,930
(17,286,768)
(12,837,726)
-
3,760
(58,564)
(249,370)
1,236,230
5,057
(152,892)
-
Net cash flows from/(used in) operating activities
6(i)
(2,916,480)
3,636,599
Cash flows from investing activities
Payments for oil and gas properties
Payments for exploration appraisal/development
Receipts from exploration partners and farmouts
Funds received on behalf of partner
Funds paid on behalf of partner
Other payments
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Payment of share issue costs
Repayment of loan notes
Proceeds from loan notes
Repayment of bank loans
Cash secured for permits
Payment of lease liabilities (right of use assets)
Net cash flows from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
held
Net foreign exchange differences
Add opening cash and cash equivalents brought forward
(5,090,328)
(5,765,139)
(129,153)
5,999,966
-
-
(323,878)
456,607
(139,854)
1,213,443
107,999
(181,253)
(64,805)
(4,829,609)
6,378,000
(316,544)
2,550,000
(140,300)
-
(2,625,000)
1,500,000
(613,491)
-
(179,934)
6,768,031
-
(629,614)
(227,151)
(117,727)
(1,189,792)
4,308,158
(2,382,802)
129,652
3,569,631
13,916
5,938,517
Closing cash and cash equivalents at the end of the year
6
8,007,441
3,569,631
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
- 52 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 1 – SUMMARY OF MATERIAL ACCOUNTING POLICIES
(i)
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and authoritative pronouncements of
the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis.
ADX Energy Ltd is a for-profit entity for the purpose of preparing the financial statements.
The financial report is presented in Australian dollars, which is the group’s presentation currency.
Functional and presentation currency
The functional currency of the parent entity is Australian Dollars. ADX has identified Australian dollars as its
functional currency on the basis that all fundraising is in Australian dollars (AUD), and loans to subsidiary companies
are made from Australian dollars.
ADX’s subsidiaries have the following functional currencies:
AuDAX Energy Srl – EUR
Bull Petroleum Pty Ltd – AUD
Terra Energy Limited – GBP
ADX VIE GmbH – EUR
Danube Petroleum Limited – GBP
ADX Energy Panonia Srl – EUR
Kathari Energia Limited – GBP
Kathari Energia GmbH – EUR
The presentation currency of the Group is Australian dollars.
Going Concern
The financial statements have been prepared on the basis that the Company will continue to meet its commitments
and can therefore continue normal business activities and realise assets and settle liabilities in the ordinary course
of business.
As a producer in Austria, the Group expects to generate cash flows, however with a focus on exploration and
development in other parts of Europe, the Group may need additional cash flows to finance these activities. As a
consequence, the ability of the Company to continue as a going concern may require additional capital fundraising,
farmouts of projects or other financing opportunities. The Directors believe that the Company will continue as a
going concern. As a result the financial statements have been prepared on a going concern basis. However, should
fundraising, farmouts or any alternative financing opportunities be unsuccessful, the Company may not be able to
continue as a going concern. No adjustments have been made relating to the recoverability and classification of
liabilities that might be necessary should the Company not continue as a going concern.
(ii)
Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(IFRS).
- 53 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 1 – SUMMARY OF MATERIAL ACCOUNTING POLICIES - continued
(iii) Adoption of new and revised standards
Early adoption of accounting standards
The Group has not elected to apply any pronouncements before their operative date in the annual reporting year
beginning 1 January 2023.
New and amended standards adopted by the Group
There were no material new or amended standards implemented that had a material impact on the financial
statements during the year.
(iv)
Significant Accounting Estimates and Judgements
Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual reporting year are:
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined using the value of the services, or a Black-Scholes
option pricing model.
Commitments - Exploration
The Group has certain minimum exploration commitments to maintain its right of tenure of its permits. These
commitments require estimates of the cost to perform exploration work required under these permits.
Deferred Appraisal Costs
The Group capitalises acquisition expenditure and appraisal costs relating to its permits where it is considered likely
to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the
existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the
Directors are of the continued belief that such expenditure should not be written off since exploration activities in
such areas have not yet concluded.
Impairment of Oil and Gas Properties
For oil and gas properties, the expected future cash flow estimation is based on a number of factors, variables and
assumptions, the most important of which are estimates of reserves and resources, future production profiles,
commodity prices, costs and foreign exchange rates. These estimates may impact any impairment calculations.
- 54 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 1 – SUMMARY OF MATERIAL ACCOUNTING POLICIES - continued
(iv) Significant Accounting Estimates and Judgements - continued
Provision for Restoration and Rehabilitation
Obligations associated with exploration, development and production assets are recognised when the Group has a
present obligation, the future sacrifice of the economic benefits is probable, and the provision can be measured
reliably. The determination of the provision requires significant judgement in terms of the best estimate of the costs
of performing the work required, the timing of the cash flows and the appropriate discount rate. A change in any,
or a combination of, the key assumptions used to determine the provision could have a material impact on the
carrying value of the provision.
On an ongoing basis, the restoration will be remeasured in line with the changes in the time value of money
(recognised as an expense and an increase in the provision), and additional disturbances recognised as additions to
the provision. The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (where the effect of the time value of money is material).
Asset retirement obligation costs will be incurred by the Group at the end of the operating life of some of the
Group’s facilities and properties. The Group assesses its asset retirement obligations provision at each reporting
date. The ultimate asset retirement obligations costs are uncertain and cost estimates can vary in response to many
factors, including changes to relevant legal requirements, the emergence of new restoration techniques or
experience at other production sites. The expected timing, extent and amount of expense can also change.
Therefore, significant estimates and assumptions are made in determining the provision for asset retirement
obligations. As a result, there could be significant adjustments to the provisions established which would affect
future financial results. The provision at reporting date represents management’s best estimate of the present value
of the future asset retirement obligations costs required.
(v)
Foreign currency translation
The presentation currency of the Group is Australian Dollars. The functional currency of ADX Energy Ltd is Australian
Dollars. ADX’s subsidiaries have the following functional currencies:
Danube Petroleum Limited – GBP
Bull Petroleum Pty Ltd – AUD
Terra Energy Limited – GBP
Kathari Energia Limited – GBP
AuDAX Energy Srl – EUR
ADX VIE GmbH – EUR
ADX Energy Panonia Srl – EUR
Kathari Energia GmbH – EUR
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are converted at the rate
of exchange ruling at the balance sheet date.
As at the reporting date the assets and liabilities of the subsidiaries are translated into the presentation currency of
ADX Energy Ltd at the rate of exchange ruling at the balance sheet date and the income statements are translated
at the weighted average exchange rates for the year.
The exchange differences arising on the retranslation are taken directly to a separate component of equity. On
disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign
operation is recognised in the income statement.
- 55 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 2 –INCOME AND EXPENSES
Revenue
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount to
which the Group expects to be entitled. If the consideration promised includes a variable component, the Group
estimates the expected consideration for the estimated impact of the variable component at the point of recognition
and re-estimated at every reporting period. Revenue from the sale of oil and gas is recognised and measured in the
accounting period in which the goods and/or services are provided based on the amount of the transaction price
allocated to the performance obligations. The performance obligation is the supply of oil and gas over the contractual
term; the units of supply represent a series of distinct goods that are substantially the same with the same pattern of
transfer to the customer. The performance obligation is considered to be satisfied as the customer receives the supply
through the pipeline, based on the units delivered. Hence revenue is recognised over time.
Exploration, evaluation and appraisal expenditure
Exploration expenditure is expensed to the profit or loss statement as and when it is incurred and included as part of
cash flows from operating activities.
Evaluation/appraisal and development expenditure is capitalised to the Statement of Financial Position as oil and gas
properties. Evaluation/appraisal is deemed to be activities undertaken following a discovery from the beginning of
appraisal and pre-feasibility studies conducted to assess the technical and commercial viability of extracting a resource
before moving into the Development phase. The criteria for carrying forward the costs are:
- Such costs are expected to be recouped through successful development and exploitation of the area of interest,
or alternatively by its sale; or
- Evaluation activities in the area of interest which has not yet reached a state which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area are continuing.
Costs carried forward in respect of an area of interest which is abandoned are written off in the year in which the
abandonment decision is made.
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
Note
OPERATING REVENUE
Oil sales
Gas sales
Hedging gains/(losses), net
Other operating revenue (including reimbursements)
COST OF GOODS SOLD
Operating costs
Royalties
Depreciation
Amortisation of asset retirement obligation assets
Partner share of ANS-3 operations
25
11,831,146
1,051,873
12,883,019
(109,679)
404,868
9,873,014
4,578,156
14,451,170
(630,812)
632,376
13,178,208
14,452,734
8,473,800
746,322
2,281,358
274,460
89,427
6,473,304
127,009
2,124,200
197,675
(30,278)
11,865,367
8,891,910
- 56 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
Note
NOTE 2 –INCOME AND EXPENSES - continued
OTHER INCOME:
Income from farmouts - costs recoveries
Option fee income
Interest revenue
Other
OTHER EXPENSES – Administration and corporate expenses:
Share based payments – in lieu of cash remuneration
Share based payments – in lieu of other services
Share based payments – performance rights and options
Less: prior period accrued share based payments
Add: accrued share based payments issued/to be issued after
period end
Net foreign exchange losses/(gains)
Short term lease expenses
Depreciation – right of use assets
Defined contribution superannuation/pension expense
Other administration, personnel and corporate expenses
3(a)
Less: project cost recoveries
OTHER EXPENSES – Finance costs:
Interest expense
Accretion
Right of use assets – interest
Share based payments – borrowing costs
3(a)
3,391,226
163,635
3,760
69,836
3,628,457
470,062
-
634,590
1,104,652
(140,335)
482,884
(84,892)
88,341
133,692
153,430
5,233,086
6,970,858
-
-
5,057
-
5,057
429,665
42,000
23,463
495,128
(90,538)
140,334
44,033
39,553
115,517
118,719
3,928,520
4,791,266
(2,075,310)
(1,193,159)
4,895,548
3,598,107
81,961
91,740
22,271
48,467
139,947
68,357
2,133
-
244,439
210,437
NOTE 3 – EQUITY-BASED PAYMENTS
Equity settled transactions:
The Group provides benefits to executive directors, employees and consultants of the Group in the form of share-based
payments, whereby those individuals render services in exchange for shares or rights over shares (equity-settled
transactions).
When provided, the cost of these equity-settled transactions with these individuals is measured by reference to the fair
value of the equity instruments at the date at which they are granted.
- 57 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 3 – EQUITY-BASED PAYMENTS – continued
The fair value of options is determined either using the Black-Scholes option pricing model, or in the case of consulting by
directors, the number of options granted will be determined by dividing the Directors’ consulting fees that the Company
has agreed to pay to the Related Parties via equity using a deemed price based on the volume weighted average sale price
of Shares sold on ASX during the 90 days prior to the expiration of the corresponding calendar quarter in which the
Directors’ consulting fees were incurred. In valuing equity-settled transactions, no account is taken of any performance
conditions, other than conditions linked to the price of the shares of ADX Energy Ltd (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become
fully entitled to the award (the vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i)
(ii)
(iii)
the grant date fair value of the award;
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors of the Company, will ultimately vest taking into
account such factors as the likelihood of non-market performance conditions being met.
This opinion is formed based on the best available information at reporting date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon
a market condition.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. If an equity-settled award is forfeited, any expense previously
recognised for the award is reversed. However, if a new award is substituted for a cancelled award and designated as a
replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification
of the original award, as described in the previous paragraph.
(a) Value of equity based payments in the financial statements
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
Note
Expensed against issued capital:
Share-based payments – Options in lieu of capital raising costs
Share-based payments – Shares in lieu of capital raising costs
Expensed in the profit and loss:
Share-based payments – Employee Performance Rights and Options 3(b)(iv)
Options issued in lieu of fees:
Share-based payments – Options Issued to Directors
3(b)(ii)
Shares issued in lieu of fees:
Share-based payments – Shares Issued to Directors
Share-based payments – Shares Issued to other KMPs
Share-based payments – Shares Issued to consultants
Share-based payments – Shares Issued for other services
3(b)(i)
3(b)(iii)
3(b)(iii)
-
-
-
49,820
51,000
100,820
634,590
23,463
133,875
768,465
197,417
19,200
119,570
-
1,104,652
161,532
184,995
93,341
19,200
155,592
42,000
495,128
Options issued to loan note holders - Share-based payments –
Borrowing costs
12
48,467
-
- 58 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b) Summary of remuneration equity-based payments granted during the year:
(i)
Shares granted to Directors pursuant to ADX’ Directors’ Share Plan, approved by Shareholders on 12 May
2023 as follows:
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10)
existing Securities into one (1) Security. All data below is based on post-consolidation data.
Date Issued
24/01/2023
26/05/2023
26/05/2023
21/08/2023
22/11/2023
Number of
Shares
35,714
897,140
640,959
677,120
442,795
2,693,728
Value based on 90
Day VWAP $
2,500
62,800
44,867
47,398
39,852
197,417
In lieu of part remuneration for
the quarter ended
31/12/2022
2022 Year
31/03/2023
30/06/2023
30/09/2023
Issued Subsequent to
Year End
02/02/2024
Summarised as:
Director
Ian Tchacos
Paul Fink
Edouard Etienvre
Andrew Childs
Issued during the year
214,660
22,969
31/12/2023
2023
Number of
Shares
67,460
67,460
2,558,808
-
2,693,728
2023
Remuneration
value $
5,000
5,000
187,417
-
197,417
2022
Number of
Shares
62,574
62,574
1,041,264
-
1,166,412
2022
Remuneration
value $
5,000
5,000
83,341
-
93,341
(ii)
Options granted to Directors pursuant to ADXs’ Performance Rights and Option Plan, approved by
Shareholders on 12 May 2023 as follows:
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10)
existing Securities into one (1) Security. All data below is based on post-consolidation data.
Date Issued
24/01/2023
26/05/2023
21/08/2023
22/11/2023
Number of
Options
514,955
470,759
499,554
332,291
Value based on 90
Day VWAP $
36,047
32,953
34,969
29,906
In lieu of part remuneration for
the quarter ended
31/12/2022
31/03/2023
30/06/2023
30/09/2023
1,817,560
133,875
Issued Subsequent to
Year End
02/02/2024
131,425
14,062
31/12/2023
- 59 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b)
Summary of remuneration equity-based payments granted during the year - continued:
Summarised as:
Director
Ian Tchacos
Paul Fink
Issued during the year
2023
Number of
Options
1,078,572
738,988
1,817,560
2023
Remuneration
value $
79,875
54,000
133,875
2022
Number of
Options
1,147,402
841,850
1,989,252
2022
Remuneration
value $
93,563
67,969
161,532
(iii)
Shares to consultants and company secretaries in lieu of remuneration:
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing
Securities into one (1) Security. All data below is based on post-consolidation data.
Date Issued
24/01/2023
26/05/2023
21/08/2023
22/11/2023
Number of Shares
$
556,967
378,970
438,250
503,684
1,877,871
38,988
26,528
30,677
42,577
138,770
In lieu of part remuneration for
the quarter ended
31/12/2022
31/03/2023
30/06/2023
30/09/2023
Issued Subsequent to
Year End
02/02/2024
Summarised as:
Other KMPs
Amanda Sparks
Consultants
Other consultants
Issued during the year
402,643
41,388
31/12/2023
2023
Number of
Shares
2023
Remuneration
value $
2022
Number of
Shares
2022
Remuneration
value $
259,046
19,200
232,208
19,200
1,618,825
1,877,871
119,570
138,770
1,923,081
2,155,289
155,592
174,792
(iv)
During the year the following securities were granted as equity compensation benefits to employees and
consultants:
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing
Securities into one (1) Security. All data below is based on post-consolidation data.
a) 6,628,000 unlisted performance rights granted on 1 June 2023 to employees in Vienna pursuant to the
Company’s Employee Incentive Plan for the 2022 year. On 8 June 2023, 5,641,853 of the Performance rights
vested into fully paid ordinary shares, and 986,147 Performance rights lapsed.
b) 3,850,000 unlisted options granted and allotted on 21 November 2023 to employees and consultants pursuant
to the Company’s Employee Incentive Plan; and
c) 2,500,000 unlisted options granted and allotted on 6 December 2023 to consultants pursuant to the
Company’s Employee Incentive Plan.
- 60 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(b)
Summary of remuneration equity-based payments granted during the year - continued:
The inputs to the model used were:
Grant date
Spot price ($)
Exercise price ($)
Vesting date
Expiry date
Expected future
volatility (%)
Risk-free rate (%)
Dividend yield (%)
Value Each ($)
Number Granted
Valuation Method
1/06/2023
Performance rights
0.07
Nil
8/6/2023
Upon vesting
N/A
-
-
0.07
6,628,000
21/11/2023
Options
0.115
0.17
Immediately
30/04/2025
100
4.01
-
0.0416
3,850,000
6/12/2023
Options
0.10
0.17
Immediately
30/04/2025
100
4.01
-
0.0318
2,500,000
Market Price at Grant
Date
Black-Scholes
Black-Scholes
Black-Scholes option pricing model
The assessed fair values of the options were determined using a Black-Scholes option pricing model, taking
into account the exercise price, term of option, the share price at grant date and expected price volatility of
the underlying share, expected dividend yield and the risk-free interest rate for the term of the option. The
expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of
future trends, which may also not necessarily be the actual outcome. No other features of options granted
were incorporated into the measurement of fair value.
- 61 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 3 – EQUITY-BASED PAYMENTS – continued
(c) Weighted average exercise price
The following table shows the number and weighted average exercise price (WAEP) of share options granted as
remuneration share based payments.
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing Securities
into one (1) Security. All data below is based on post-consolidation data.
12 Months to
31 December
2023
Number
12 Months to
31 December
2023
WAEP $
12 Months to
31 December
2022
Number
12 Months to
31 December
2022
WAEP $
Outstanding at the beginning of year
Granted to Directors during the year
Granted to employees during the year
Granted in lieu of fees
Lapsed during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at year end
5,653,997
1,817,559
6,350,000
-
-
(2,580,756)
11,240,800
11,240,800
0.02
Nil
0.17
-
-
-
0.13
0.13
6,003,510
1,989,252
-
425,000
(438,750)
(2,325,015)
5,653,997
5,653,997
0.1
Nil
-
0.13
0.15
-
0.02
0.02
The weighted average share price for options exercised during the year was $Nil (2022: $Nil).
(d) Weighted average fair value
The weighted average fair value of remuneration equity-based payment options granted during the year was $0.046 (2022:
$0.06).
(e) Range of exercise price
The range of exercise price for options granted as remuneration share based payments outstanding at the end of the
year was $nil to $0.17 (2022: $nil to $0.13).
(f) Weighted average remaining contractual life
The weighted average remaining contractual life of remuneration share based payment options that were outstanding as
at the end of the year was 1.63 years (2022: 2.32 years).
- 62 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 4 - INCOME TAX EXPENSE
(a) Income Tax Expense
The reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Company’s
applicable income tax rate is as follows:
Loss for year before tax
Prima facie income tax (benefit) @ 30%
Tax effect of non-deductible items
Tax rate differential
Windfall tax - Austria
Translation differences
Tax rate change – Austria
Deferred tax assets not brought to account
Income tax expense/(benefit) attributable to operating result
(b) Current tax liabilities
Current tax liabilities
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
(4,599,566)
(1,379,870)
(2,048,843)
(614,653)
727,502
109,895
-
(2,509)
26,471
128,660
(389,851)
616,040
(38,763)
178,777
16,441
-
231,189
389,031
-
233,807
(c) Deferred tax assets not recognised relate to the following:
Tax losses
15,065,555
14,642,907
These deferred tax assets have not been brought to account as it is not
probable that tax profits will be available against which deductible
temporary differences can be utilised.
(d) Deferred tax assets and liabilities:
Deferred tax assets:
Tax losses - Austria
Temporary differences - Other
Less: Offset Deferred Tax Liabilities:
Temporary differences - Oil and gas properties, net of JV
Temporary differences - Asset retirement obligations
Temporary differences - Other
(e) Franking Credits
The franking account balance at year end was $nil (2022: $nil).
(f) Tax Consolidation Legislation
2,769,083
306,660
(1,271,132)
(35,558)
(278,250)
1,490,803
1,118,269
70,342
(6,185)
(60,916)
(55,117)
1,066,393
ADX Energy Ltd and its 100% owned Australian subsidiaries have not formed a tax consolidated group.
- 63 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 5 - EARNINGS PER SHARE
Note: Effective 28 September 2023, ADX Shareholders approved a capital
conversion of every ten (10) existing Securities into one (1) Security. All data
below is based on post-consolidation data.
Basic loss per share attributable to members of ADX Energy Ltd
Consolidated
Year Ended
31 Dec 2023
Cents
Year Ended
31 Dec 2022
Cents
(1.12)
$
(0.72)
$
Loss attributable to ordinary equity holders of the Company used in
calculating:
- basic earnings per share
(4,064,209)
(2,304,263)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
Diluted earnings per share is not disclosed because potential ordinary shares,
being options granted, are not dilutive and their conversion to ordinary
shares would not demonstrate an inferior view of the earnings performance
of the Company.
Number
of shares
Number
of shares
362,870,060
321,305,210
NOTE 6 - CASH AND CASH EQUIVALENTS
Cash at bank and on hand
8,007,441
3,569,631
- 64 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 6 - CASH AND CASH EQUIVALENTS – continued
(i) Reconciliation of loss for the period to net cash flows used in operating
activities
Loss after income tax
Income from partners classified as investing cash flows
Non-Cash Items:
Depreciation and amortisation
Restoration expenses – changes in abandonment provision
Dry well costs
Impairment of wells
Loss on sale of plant and equipment
Foreign exchange losses/(gains)
Share-based payments expensed
Accretion
Change in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in oil and gas assets
(Increase)/decrease in deferred tax assets
Increase/(decrease) in payables
Increase/(decrease) in income tax payable
Increase/(decrease) in lease liabilities
Increase/(decrease) in provisions
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
(4,209,715)
(2,829,402)
(2,437,874)
-
2,689,510
970,159
1,638,550
-
4,418
(84,892)
1,153,119
91,740
(232,997)
(1,310,583)
(657,342)
(424,409)
404,434
(233,808)
3,122
111,616
2,437,392
881,944
-
817,122
1,211
44,033
495,128
68,357
777,458
(84,820)
-
170,884
194,958
233,808
-
36,998
Net cash flows (used in)/from operating activities
(2,916,480)
3,636,599
(ii) Non-Cash Financing and Investing Activities
There were no non-cash financing or investing activities during the year other than the issue of 8,150,000 options
to loan note holders ($145,400). Refer to note 12. (2022: $100,820 for shares and options issued to lead manager
of a placement). Other non-cash operating activities, consisting of shares and options granted in lieu of
remuneration are disclosed in note 3.
- 65 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 7 – TRADE AND OTHER RECEIVABLES
Current
Trade and other debtors
Accrued income – back costs
GST/VAT refundable
Prepayments
Prepayments – inventories
Cash secured for credit cards
Others
Total current receivables
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
754,896
728,038
845,741
579,626
438,488
20,000
55,190
1,371,408
-
55,225
536,505
-
20,000
107,807
3,421,979
2,090,945
Information about the impairment of trade and other receivables, their credit quality and the group’s exposure to
credit risk, foreign currency risk and interest rate risk can be found in note 24. Receivables do not contain past due or
impaired assets as at 31 December 2023 (2022: none).
Non-Current
Cash secured for bank loans and licences
Prepayments
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
1,104,192
-
1,104,192
1,072,992
64,805
1,137,797
EUR 120,000 (AUD 194,143) is held as security for bank loans – refer note 12. The remaining EUR 562,501 (AUD
910,049) is secured for the Group’s AGS licences in Austria.
NOTE 8 – INVENTORIES
Inventories include hydrocarbon stocks, consumable supplies and maintenance and drilling spares. Inventories are
valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes direct
costs and an appropriate portion of fixed and variable production overheads where applicable. Inventories determined
to be obsolete or damaged are written down to net realisable value, being the estimated selling price less selling costs.
Consolidated
Year Ended
31 Dec 2023
$
-
46,732
2,208,635
2,255,367
Year Ended
31 Dec 2022
$
473,178
58,806
351,215
883,199
Drilling inventories
Oil and gas inventories
Materials and consumables
Total current inventories
- 66 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 9 – OIL AND GAS PROPERTIES
Oil and gas properties are stated at cost less accumulated depreciation and impairment charges. Oil and gas properties
include the costs to acquire, construct, install or complete production and infrastructure facilities such as pipelines,
capitalised borrowing costs, development wells and the estimated cost of dismantling and restoration. Subsequent
capital costs, including major maintenance, are included in the asset’s carrying amount only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably
measured.
Oil and gas properties and other plant and equipment are depreciated to their estimated residual values at rates based
on their expected useful lives with a maximum period of 100 months. All items of oil and gas properties are depreciated
using the straight-line method over their useful life capped at 100 months. They majority of the Oil and Gas equipment
is depreciated over 8.3 years.
Impairment: Oil and gas properties are assessed for impairment on a cash-generating unit (CGU) basis. Individual assets
within a CGU may become impaired if their ongoing use changes or if the benefits to be obtained from ongoing use
are likely to be less than the carrying value of the individual asset.
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
266,833
182,913
340,222
3,511,728
6,960,443
1,655,805
3,072,838
10,807
296,672
177,793
265,259
3,723,913
4,647,644
1,441,571
4,588,376
21,132
16,001,589
15,162,360
9,143,998
25,145,587
8,513,327
23,675,687
296,672
(38,817)
8,978
266,833
177,793
5,120
182,913
331,264
(36,338)
1,746
296,672
176,351
1,442
177,793
Austria
Buildings
Undeveloped land
Field office fixtures and equipment
Plant and machinery
Wells
Retirement obligation assets
Construction in progress
Rights and other intangible assets
Romania
Appraisal costs
Reconciliation of the carrying amount of oil and gas assets:
Buildings – opening balance
Depreciation
Translation differences
Undeveloped Land – opening balance
Translation differences
- 67 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 9 – OIL AND GAS PROPERTIES - continued
Field office fixtures and equipment – opening balance
Additions
Disposals
Depreciation
Translation differences
Plant and machinery – opening balance
Additions
Depreciation
Translation differences
Wells – opening balance
Additions
Transfers
Depreciation
Impairment
Translation differences
During the prior year, $817,122 of impairment was recorded for wells that
are no longer economic. These wells have not been abandoned and may
become economic in the future.
Retirement obligation assets (Austria) – opening balance
Additions
Amortisation
Translation differences
Construction in progress – opening balance
Additions – net of partner contributions
Transfers to Wells
Dry well costs expensed
Translation differences
- 68 -
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
265,259
143,408
-
(75,321)
6,876
340,222
3,723,913
373,687
(696,730)
110,858
3,511,728
4,647,644
94,323
3,568,743
(1,459,433)
-
109,166
6,960,443
1,441,571
449,456
(274,460)
39,238
1,655,805
4,588,376
3,494,943
(3,568,743)
(1,638,550)
196,812
3,072,838
333,519
-
(1,287)
(67,913)
940
265,259
4,460,030
-
(752,634)
16,517
3,723,913
6,527,211
196,132
-
(1,256,963)
(817,122)
(1,614)
4,647,644
1,446,983
187,795
(197,675)
4,468
1,441,571
2,473,884
2,168,855
-
-
(54,363)
4,588,376
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 9 – OIL AND GAS PROPERTIES - continued
Rights and other intangible assets – opening balance
Depreciation
Translation differences
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
21,132
(11,057)
732
10,807
31,501
(10,352)
(17)
21,132
Appraisal costs – Romania – opening balance
8,513,327
8,085,301
148,804
237,826
244,041
253,618
108,507
65,901
9,143,998
8,513,327
1,209,783
239,640
239,640
1,263,948
(156,782)
(133,692)
(3,331)
1,209,783
356,545
-
-
(115,517)
(1,388)
239,640
5,113,468
23,397
5,136,865
2,336,041
-
2,336,041
Additions
Additions – rehabilitation and restoration provision – note 14
Translation differences
NOTE 10 – RIGHT OF USE ASSETS
Non-Current Assets
Right of use assets - properties
Reconciliation of the carrying amount of right of use assets:
Opening balance
Additions
Disposals
Depreciation
Translation differences
Refer to note 13 for lease liabilities for right of use assets.
NOTE 11 – TRADE AND OTHER PAYABLES
Current
Trade creditors and accruals
Accrued interest payable
The Group’s exposure to interest rate risk is discussed in Note 24.
- 69 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 12 – BORROWINGS
Loan Notes
On 11 July 2023, ADX secured $1,500,000 in loan note funding. A total of 30 loan notes of $ 50,000 each totalling $
1,500,000 (Loan Notes) were issued to a small number of supportive existing shareholders and new sophisticated
investors. The Loan Notes are unsecured. The terms for the Loan Notes are summarised as follows:
Face Value of Each Loan Note
Number of Loan Notes Issued
Total Loans aggregate amount
Loan Term
per
Rate
annum
Interest
(payable quarterly in arrears)
Free Attaching Unlisted Options
with an Exercise Price of $0.10,
expiring 11 January 2025
Free Attaching Unlisted Options
with an Exercise Price of $0.14,
expiring 11 January 2025
* Post-consolidated amounts
Loan Note A
$50,000
20
$1,000,000
18 Months
(11 January 2025)
8%
150,000 Options
per Loan Note
(3,000,000 in Total)
150,000 Options
per Loan Note
(3,000,000 in Total)
Loan Note B
$50,000
10
$500,000
18 Months
(11 January 2025)
12%
-
215,000 Options
per Loan Note
(2,150,000 in Total)
Total Loan Notes
$50,000
30
$1,500,000
18 Months
(11 January 2025)
8-12%
Total of 3,000,000
Options*
Total of 5,150,000
Options*
The Options were valued using a Black-Scholes option pricing model (total value $145,400). The inputs to the model
used were:
Valuation date
Spot price ($)
Exercise price ($)
Vesting date
Expiry date
Expected future volatility (%)
Risk-free rate (%)
Dividend yield (%)
Value Each ($)
Number Granted
Total Value $
5/7/2023
5/7/2023
0.07
0.10
0.07
0.14
Immediately
11/01/2025
Immediately
11/01/2025
80
8
-
0.021
3,000,000
63,000
100
12
-
0.016
5,150,000
82,400
- 70 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 12 – BORROWINGS - continued
Bank Loans
As announced on 5 August 2020, ADX’ Austrian subsidiary, ADX VIE GmbH, secured banking facilities totalling EUR
1,130,000 from Volksbank Wien AG (Volksbank) and guaranteed by the Austria Wirtschafts (“Economy”) Service
(the Innovation and Start Up Financing bank of the Austrian state) (AWS), split between two loan facilities:
-
Loan A - EUR 500,000 (A$ 808,931): interest-free until 31 July 2022, at which point interest charged is at Euribor
plus 0.75%, with the rate to be at least 0%; and
Loan B - EUR 630,000 (A$ 1,019,253): incurring interest at 1% per annum on the drawn down value.
-
The Collateral for the loan facilities is EUR 120,000 (A$ 194,143) (held in an ADX VIE GmbH bank account with
Volksbank).
The loans are fully drawn. Loan repayments commenced on 30 June 2022 and continue to be repaid every six
months through to 31 December 2024.
Loan covenants restrict dividends and profit distributions but do not prevent payment of intercompany recharges
or loans. A negative pledge relating to other debt is limited to taking up further debt at a subsidiary level and
does not restrict servicing of existing debt.
As at the date of this report, EUR 753,332.66 (A$ 1,218,787.67) of these loans have been repaid.
Current
Bank loans – Loan A - interest bearing
Bank loans – Loan B - interest bearing
Non-Current
Loan notes – interest bearing - unsecured
Loan notes – borrowing costs (options)
Loan notes – borrowing costs (options - accretion)
Loan notes – net
Bank loans – Loan A - interest bearing
Bank loans – Loan B - interest bearing
The Group’s exposure to liquidity and interest rate risk is discussed in Note 24.
Consolidated
Year Ended
31 Dec 2023
$
Year Ended
31 Dec 2022
$
339,751
269,643
609,394
1,500,000
(145,400)
48,467
1,403,067
-
-
1,403,067
262,096
330,240
592,336
-
-
-
-
262,096
330,240
592,336
- 71 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 13 – LEASE LIABILITIES
Current
Right of use assets
Other
Non-Current
Right of use assets
Other
NOTE 14 – PROVISIONS
Current
Provision for employee entitlements
Non-Current
Provision for employee entitlements
Consolidated
31 December
2023
$
31 December
2022
$
105,644
-
105,644
1,110,752
-
1,110,752
120,462
10,299
130,761
119,819
36,206
156,025
241,701
347,640
234,346
16,793
Provision for asset retirement obligations (ARO) – production assets
17,144,238
15,207,275
Provision for rehabilitation and restoration – Romania
907,620
651,046
18,286,204
15,875,114
Provision for asset retirement obligations (non-current) – opening balance
15,207,275
13,909,846
Additions capitalised – note 9
Additions expensed
Accretion
Translation differences
449,456
970,159
91,740
425,608
187,795
881,944
68,357
159,333
Provision for asset retirement obligations (non-current) – closing balance
17,144,238
15,207,275
Provision for rehabilitation and restoration – Romania – opening balance
Additions capitalised - note 9
Translation differences
Provision for rehabilitation and restoration – Romania – closing balance
651,046
237,826
18,748
907,620
538,138
108,507
4,401
651,046
- 72 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 15 – ISSUED CAPITAL
(a)
Issued Capital
Ordinary shares fully paid
(b) Movements in Ordinary Share Capital
31 December
2023
$
31 December
2022
$
90,503,290
84,105,646
Note: Effective 28 September 2023, ADX Shareholders approved a capital conversion of every ten (10) existing Securities
into one (1) Security. All data below is based on post-consolidation data.
Number of
Shares
Summary of Movements – Current Year (2023)
351,291,583 Opening balance 1 January 2023
35,714
68,571
488,396
305,956
591,184
640,959
68,571
310,399
Issue of shares to Directors (part remuneration for 12/2022
quarter)
Issue of shares to Company Secretary (remuneration for 12/2022
quarter)
Issue of shares to Consultants (remuneration for 12/2022 quarter)
Issue of shares to Directors (part remuneration for 09/2022
quarter)
Issue of shares to Directors (part remuneration for 12/2022
quarter)
Issue of shares to Directors (part remuneration for 3/2023 quarter)
Issue of shares to Company Secretary (remuneration for 3/2023
quarter)
Issue of shares to Consultants (remuneration for 3/2023 quarter)
5,641,853 Shares issued upon exercise of Performance Rights
2,580,756 Options exercised by Directors at $Nil
677,120
68,571
369,679
442,795
53,333
450,351
Issue of shares to Directors (part remuneration for 6/2023 quarter)
Issue of shares to Company Secretary (remuneration for 6/2023
quarter)
Issue of shares to Consultants (remuneration for 6/2023 quarter)
Issue of shares to Directors (part remuneration for 9/2023 quarter)
Issue of shares to Company Secretary (remuneration for 9/2023
quarter)
Issue of shares to Consultants (remuneration for 9/2023 quarter)
48,000,000 Placement and SPP at 10 cents
15,780,000 Placement and SPP at 10 cents
Costs of share issues – cash
427,865,791 Closing Balance as at 31 December 2023
Note
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(i)
3(b)(i)
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(iv)
15(c)(ii)
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(i)
3(b)(iii)
3(b)(iii)
15(b)(i)
15(b)(ii)
2023
$
84,105,646
2,500
4,800
34,188
21,417
41,383
44,867
4,800
21,728
-
-
47,398
4,800
25,878
39,852
4,800
37,777
4,800,000
1,578,000
(316,544)
90,503,290
- 73 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 15 – ISSUED CAPITAL - continued
(b) Movements in Ordinary Share Capital
Number of
Shares
Summary of Movements – Prior Year (2022)
2,974,437,202 Opening balance 1 January 2022
902,728
436,363
3,627,388
Issue of shares to Directors (part remuneration for 12/2021
quarter)
Issue of shares to Company Secretary (remuneration for 12/2021
quarter)
Issue of shares to Consultants (remuneration for 12/2021 quarter)
43,258,177 Shares issued upon exercise of Performance Rights
23,250,146 Options exercised by Directors at $Nil
5,250,000 Shares issued to advisor (cash)
154,253
3,185,543
600,000
4,657,511
Issue of shares to Directors (part remuneration for 12/2021
quarter)
Issue of shares to Directors (part remuneration for 3/2022 quarter)
Issue of shares to Company Secretary (remuneration for 3/2022
quarter)
Issue of shares to Consultants (remuneration for 3/2022 quarter)
425,000,000 Placement at 6 cents
8,500,000
4,741,208
600,000
6,429,146
2,680,384
685,714
4,516,771
Issue of shares in lieu of broker fees (non-cash)
Issue of shares to Directors (part remuneration for 6/2022 quarter)
Issue of shares to Company Secretary (remuneration for 6/2022
quarter)
Issue of shares to Consultants (remuneration for 6/2022 quarter)
Issue of shares to Directors (part remuneration for 9/2022 quarter)
Issue of shares to Company Secretary (remuneration for 9/2022
quarter)
Issue of shares to Consultants (remuneration for 9/2022 quarter)
Costs of share issues – non-cash
Costs of share issues – cash
3,512,912,534 Closing Balance as at 31 December 2022
2022
$
3(b)(i)
81,435,632
9,930
3(b)(iii)
4,800
3(b)(iii)
3(b)(vi)
15(c)(ii)
3(b)(iii)
3(b)(i)
3(b)(i)
3(b)(iii)
3(b)(iii)
15(b)(i)
3(b)(v)
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(i)
3(b)(iii)
3(b)(iii)
3(b)(v)
37,777
-
-
42,000
1,234
25,484
4,800
36,796
2,550,000
51,000
37,930
4,800
49,979
18,763
4,800
31,041
(100,820)
(140,300)
84,105,646
Current Year transactions:
(i)
Placement Raising A$ 4.8 million
In November 2023, ADX advised it had successfully raised $ 4.8 million from placements totalling 48,000,000
shares at a price of $ 0.10 per share to sophisticated, institutional and professional investors. One (1) free
attaching unlisted option was issued for every two (2) Placement Shares. The exercise price of the Placement
Options is $ 0.16 with an expiry date of 31 December 2024.
The funds raised from the Placement and the Securities Purchase Plan will be applied to near term activities of
the Company, which included funding of the Company’s increased economic interest in the recently completed
Anshof-2 Appraisal Well, the installation of permanent production facilities at Anshof to enable increased
production from the Anshof-3 and Anshof-2 Wells as well as funding for the Company’s share of the Welchau-1
Exploration Well.
- 74 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 15 – ISSUED CAPITAL - continued
(b) Movements in Ordinary Share Capital - continued
(ii)
Securities Purchase Plan (SPP) Raising A$ 1.578 million
On 22 November 2023, eligible Shareholders (SPP Participants) were invited to participate in a Securities Purchase
Plan Offer at $ 0.10 per Share. This was the same price as the offer price under the Placement. SPP Participants
also received one free-attaching unquoted option to acquire a Share for every two SPP Shares issued. The SPP
Options are exercisable on the same terms as the Placement Options. The 15,780,000 SPP Shares and 7,890,000
SPP Options were issued on 22 December 2023.
(c) Options on issue at year end
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Total Options
During the year:
Note
15(c)(iii)
15(c)(iv)
15(c)(iv)
Number
23,175,011
511,608
31,640,000
3,000,000
5,150,000
725,000
6,350,000
314,584
245,625
329,465
185,796
311,719
269,532
380,358
283,929
275,893
300,000
332,291
73,780,811
Exercise Price
13 cents
Nil cents
16 cents
10 cents
14 cents
Nil cents
17 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Expiry Date
10/08/2024
31/10/2024
31/12/2024
11/01/2025
11/01/2025
31/01/2025
30/04/2025
31/05/2025
31/07/2025
31/10/2025
31/01/2026
31/05/2026
31/07/2026
31/10/2026
31/01/2027
31/05/2027
31/07/2027
31/10/2027
(i) 1,817,560 unlisted options were granted in lieu of remuneration to Directors Ian Tchacos and Paul Fink.
Refer note 3(b)(ii).
(ii) 2,580,757 unlisted options were exercised by Directors (exercise price was nil as these were previously
granted in lieu of remuneration).
(iii) 31,640,000 unlisted options were issued for every two shares subscribed for in November 2023
Placement and December 2023 Securities Purchase Plan..
(iv) 3,000,000 unlisted options with an exercise price of $0.10 and 5,150,000 unlisted options with an exercise
price of $0.14were issued to Loan Note holders – refer to note 12.
(v) 6,780,006 unlisted options with an exercise price of $0.15 lapsed during the year.
- 75 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated
31 December
2023
$
31 December
2022
$
6,638,109
(1,238,619)
5,724,244
(1,603,160)
5,399,490
4,121,084
5,724,244
913,865
6,638,109
5,489,429
234,815
5,724,244
(1,603,160)
364,541
(1,238,619)
(1,706,318)
103,158
(1,603,160)
NOTE 16 - RESERVES
Share-based payments reserve
Foreign currency translation reserve
Share-based payments reserve
Balance at the beginning of the year
Share-based payments (options granted)
Balance at the end of the year
Nature and purpose of the reserve:
The Share-based payments reserve is used to recognise the fair value of
options issued but not exercised.
Foreign currency translation reserve
Balance at the beginning of the year
Currency translation differences
Balance at the end of the year
Nature and purpose of the reserve:
The foreign currency translation reserve is used to record exchange
differences arising from the translation of the financial statements of
foreign subsidiaries.
- 76 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 17 – NON-CONTROLLING INTERESTS
Non-Controlling Interests
Movement during the year:
Balance at the beginning of the year
Share of loss for the period
Share of other comprehensive income
Balance at the end of the year
Consolidated
31 December
2023
$
8,112,092
31 December
2022
$
8,381,640
8,381,640
(145,506)
(124,042)
8,112,092
8,478,678
(133,611)
36,573
8,381,640
Non-controlling interests represent Reabold Resources Plc (LSE AIM:RBD) (Reabold) interest held in the Danube group.
The Danube Group consists of Danube Petroleum Limited (registered in England and Wales) and its wholly owned
Romanian subsidiary, ADX Energy Panonia Srl.
As at 31 December 2023, Reabold holds a 50.82% interest in Danube (2022: 50.82%). ADX Energy Ltd continues to
consolidate the Danube Group as it has control via day-to-day management, accounting and two out of three directors
on the board of Danube Petroleum Limited are directors of ADX Energy Ltd.
Summarised financial information for Danube Petroleum Limited and its 100% owned subsidiary ADX Energy Panonia SRL
is as follows. The amounts disclosed are before inter-company eliminations:
Summarised Statement of Financial Position
Current assets
Current liabilities
Current net assets
Non-current assets
Non-current liabilities
Non-current net assets
Net Assets
Summarised Statement of Profit or Loss and Other Comprehensive
Income
Revenue
Loss for the period
Other comprehensive income
Total comprehensive income
Consolidated
31 December
31 December
2023
$
569,779
(198,909)
370,870
15,861,710
(907,620)
14,954,090
2022
$
603,901
(199,450)
404,451
15,613,993
(651,046)
14,962,947
15,324,960
15,367,398
(286,309)
(244,081)
(530,390)
-
(262,911)
71,968
(190,943)
Loss allocated to Non-Controlling Interests
(145,506)
(133,612)
Other comprehensive income allocated to Non-Controlling Interests
(124,042)
36,574
- 77 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 17 – NON-CONTROLLING INTERESTS - continued
Consolidated
31 December
31 December
2023
$
2022
$
Summarised Statement of Cash Flows
Cash flows from/(used in) operating activities (including VAT paid)
Cash flows from/(used in) investing activities
Cash flows from financing activities
Net foreign exchange differences
Net increase/(decrease) in cash and cash equivalents
(139,076)
412,403
185,336
(3,501)
455,162
76,903
(253,618)
-
(45,469)
(222,184)
NOTE 18 – DERIVATIVE FINANCIAL INSTRUMENTS
The Group’s accounting policy for cash flow hedges are as follows:
Cash flow hedges are a derivative or financial instrument designated to hedge the exposure to variability in cash flows
attributable to a particular risk associated with an asset, liability or forecast transaction.
Recognition date: At the date the instrument is designated as a hedging instrument.
Measurement: Measured at fair value. The fair value of oil derivative contracts is determined by estimating the
difference between the relevant market prices and the contract price, for the volumes of the derivative contracts.
Changes in fair value: Changes in the fair value of derivatives designated as cash flow hedges are recognised
directly in other comprehensive income and accumulated in equity in the hedging reserve to the extent that the
hedge is effective. Ineffectiveness is recognised on a cash flow hedge where the cumulative change in the
designated component value of the hedging instrument exceeds on an absolute basis the change in value of the
hedged item attributable to the hedged risk. To the extent that the hedge is ineffective, changes in fair value are
recognised immediately in the income statement within other income or other expenses. Amounts accumulated
in equity are transferred to the income statement or the statement of financial position, for a non-financial asset,
at the same time as the hedged item is recognised. When a hedging instrument expires or is sold, terminated or
exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing
in equity at that time remains in equity and is recognised when the underlying forecast transaction occurs. When
a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is
immediately transferred to the income statement.
Hedge effectiveness is determined at the inception of the hedge relationship, and through regular prospective
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The
Group enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the
hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the
terms of the hedged item such that the critical terms no longer match with the critical terms of the hedging instrument,
the Group uses the hypothetical derivative method to assess effectiveness.
Hedging reserves
The hedging reserve includes the cash flow hedge reserve and the costs of hedging reserve. The cash flow hedge reserve
is used to recognise the effective portion of gains or losses on derivatives that are designated and qualify as cash flow
hedges. The group defers the changes in the forward element of forward contracts and the time value of option
contracts in the costs of hedging reserve.
- 78 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 18 – DERIVATIVE FINANCIAL INSTRUMENTS - continued
Hedging Reserve
Balance brought forward
Change in value of hedging instruments recognised in Other
Comprehensive Income for the period
Movement for the year
Balance at the end of the year
As at 31 December 2023, there were no derivative financial instruments in place.
NOTE 19 – PARENT ENTITY INFORMATION
Statement of Financial Position information
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Profit and loss information
Loss for the year
Comprehensive income for the year
Commitments and contingencies
Consolidated
31 December
31 December
2023
$
-
-
-
-
2022
$
107,389
(107,389)
(107,389)
-
Company
31 December
2023
$
31 December
2022
$
4,852,494
4,575,920
(400,138)
(1,421,993)
780,526
3,089,249
(415,353)
(16,792)
7,606,283
3,437,630
90,503,290
6,638,110
84,105,646
5,724,245
(89,535,117)
(86,392,261)
7,606,283
3,437,630
(3,142,856)
(3,142,856)
(2,597,967)
(2,597,967)
There are no commitments or contingencies, including any guarantees entered into by ADX Energy Ltd on behalf of its
subsidiaries as at year end.
- 79 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 19 – PARENT ENTITY INFORMATION - continued
Subsidiaries
Name of Controlled Entity
Class of Share
Place of
Incorporation
% Held by Parent Entity
AuDAX Energy Srl
Bull Petroleum Pty Ltd
Terra Energy Limited
ADX VIE GmbH
Danube Petroleum Limited
ADX Energy Panonia Srl
Kathari Energia Limited
Kathari Energia GmbH
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Italy
Australia
UK
Austria
UK
Romania
UK
Austria
31 December 2023
31 December 2022
100%
100%
100%
100%
100%
100%
Held 100% by Terra
Energy Limited
Held 100% by Terra
Energy Limited
49.18%
49.18%
Held 100% by
Danube Petroleum
Limited
Held 100% by
Danube Petroleum
Limited
100%
100%
Held 100% by
Kathari Energia
Limited
Held 100% by
Kathari Energia
Limited
Refer to note 17, non-controlling interests, for details on Danube Petroleum Limited Group.
NOTE 20 – COMMITMENTS AND CONTINGENCIES
(a)
Short term leases (non-cancellable):
Within one year
Later than one year, not later than five years
Balance at the end of the year
Short term leases are primarily for the office lease in Perth.
Consolidated
31 December
2023
$
31 December
2022
$
15,076
-
15,076
399,170
1,240
400,410
The Group has a lease-to-buy contract for a production unit for Anshof operations in upper Austria. The rental cost of EUR
50,000 per quarter (for a maximum of eight quarters) is capitalised as construction in progress at year end. The agreement
commenced on 1 November 2023. ADX has the option to purchase prior to the end date of 31 October 2025 with a balloon
payment of up to EUR 600,000.
Commitments and Contingencies for Oil and Gas Properties
(b)
In order to maintain current rights of tenure to exploration licenses the Company may be compelled to perform minimum
exploration activities to meet requirements specified by the relevant governments. These expenditure commitments may
be varied as a result of renegotiations, relinquishments, farm-outs or sales. Land leases in Austria are held by an unrelated
party and reimbursed by ADX. These amount to approximately EUR 51,000 per annum (A$ 81,000) and comprise
approximately 95 individual lease contracts, and have no end date or termination date.
- 80 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 20 – COMMITMENTS AND CONTINGENCIES - continued
Parta Exploration License and Iecea Mare Production License - Western Romania
Ownership of Parta Exploration License and Iecea Mare Production License.
ADX holds a 49.2% shareholding in Danube Petroleum Limited (Danube). The remaining shareholding in Danube is held by
Reabold Resources Plc. Danube via its‘ wholly owned subsidiary, ADX Energy Panonia srl, holds a 100% interest in the Parta
Exploration license (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the Iecea
Mare Production license. ADX is the operator of the permit pursuant to a Services Agreement with Danube.
Parta Exploration License
In December 2012, the Romanian Government ratified the concession agreement for ADX’ EX 10 Parta license (Parta
Permit). The committed work program agreed in June 2019 for the Parta Permit required the acquisition of 60 km of 2D
and 100 km2 of 3D seismic and the drilling of two exploration wells. Total commitments are estimated at A$ 5.4 million
(EUR 3.5 million) for a 2 year period commencing 21 June 2019 following an extension agreed with the National Agency of
Mineral Resources (NAMR), which was extended for another 18 months until 3 December 2022. ADX Energy Panonia SRL
is the Romanian license holder in accordance with the concession agreement for exploration phase 1. The total concession
agreement duration is 20 years with a possible 15 years extension. After phase 1 which expired on 3 December 2022, ADX
had the option to immediately enter phase 2, by assuming further commitments, or apply for another extension which will
require a government ratified approval. ADX has chosen the second option and is in ongoing discussions with the governing
body i.e. NAMR with a view to the submission of an extension application to the government.
Iecea Mare Production License
In 2018, ADX acquired a 100% equity interest in the Iecea Mare Production license (License). ADX has committed to pay a
5% royalty from the license seller Amromco Energy for production from wells located within License. The current
production license is valid until November 2034 and extensions are possible. The license does not carry any commitments,
but an annual work-program has to be agreed with the Romanian government (via NAMR), which then becomes a
commitment. ADX estimates the annual cost for such activities may be approximately $50,000 per annum.
Data User Agreement –Austria
In December 2019, ADX entered into a Data User Agreement (DUA) with RAG Austria AG (RAG) for access to RAG
Exploration Data (including 3650 km2 of modern 3D seismic) in the Molasse Basin, in Upper Austria. Under the DUA, ADX
has exclusive access to 3D and 2D seismic and geological data from RAG for oil and gas activities in its exploration,
production and gas storage licenses (AGS Licenses) ratified on the 1st January 2021 with the Federal Ministry responsible
for Mining (BMLRT) on behalf of the Republic of Austria as an event subsequent to year end. ADX has agreed to pay RAG
a license fee as a function of the active AGS license areas for up to 5 years. In 2023, the fee paid to RAG under the DUA
was EUR 78,652.
Upper Austria Exploration (AGS) Licenses – Austria
ADX executed concession agreements for exploration, production and gas storage in Upper Austria (Upper Austria AGS)
on the 8th of January 2021 between ADX and Federal Ministry responsible for Mining on behalf of the Republic of Austria.
Effective on 1st April 2022, ADX successfully was awarded license extensions for the Upper Austria AGS license areas ADX-
AT-I and ADX-AT-II resulting in a total area of 1022 km2. In order to secure these licenses and the related work program,
ADX VIE GmbH had to put in place a bank guarantee for an amount of EUR 937,378 (of which EUR 562,316 is secured by
cash). The total term for the Upper Austria AGS licenses including the newly awarded extension area is 16 years without
any relinquishment and the first 4-year firm period commenced on 1st January 2021. ADX has a 3 well exploration drilling
commitment during the 4-year firm period. The total remaining minimum financial obligation to keep the Upper Austria
AGS licenses in good standing taking into account expenditures already made in relation to the drilling of the Anshof-3
discovery well is EUR 1.25 million which needs to be expended in the ADX-AT-I license area before the 1st of January 2025.
In January 2024 ADX has secured funding obligation from MND Austria a.s. (MND) in relation to ADX-AT-I. MND has paid
back costs of EUR 0.45 million to ADX VIE GmbH and will fund EUR 4.5 million for exploration drilling to earn a 50%
economic interest in an Exploration Investment Area within the ADX-AT-I license. MND’s obligation will meet ADX’
obligation outstanding in relation to ADX-AT-I.
- 81 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 20 – COMMITMENTS AND CONTINGENCIES - continued
Anshof Prospect in Upper Austria – Xstate Partnership Agreement
In November 2021, ADX signed a farm-in agreement with Xstate Resources Limited (Xstate) to partially fund the drilling of
the Anshof prospect in the ADX-AT-II exploration license in Upper Austria (Farmin HOA). Under the terms of the Farmin
HOA, Xstate has funded 40% of the Anshof well drilling expenditure up to a cap amount of EUR 1.8 million (EUR 720,000
net to Xstate) to earn a 20% economic interest in the Anshof Prospect Area. Xstate satisfied its funding commitments by
funding 40% of the Anshof well drilling expenditures and has earned an economic interest in the Anshof Prospect Area.
Xstate has elected not to fund 40% of a second well in Anshof or the Anshof Farmin Area to earn a 20% economic interest
in the entire Anshof Farmin Area (Second Well Funding). As a result of the abovementioned election Xstate only has
economic rights in relation to the Anshof Prospect Area, not the entire Anshof Farmin Area.
ADX and Xstate have agreed to enter into a partnership comprised of Articles of Association, production sharing agreement
and a cooperation agreement which will cover the conduct of ongoing operations and sharing of production from the
Anshof Prospect Area.
Anshof Field Area in Upper Austria – MND Partnership Agreement
On 7 August 2023, ADX and MND entered into an Energy Investment Agreement (EIA) in relation to the appraisal and
development of the Anshof Field Area subject to the satisfaction of conditions precedent including confirmation of
acceptance of the Anshof Field Area partnership documentation by the ministry of finance of the Republic of Austria
(Bundesministerium für Finanzen) (BMF) and the payment by MND to ADX of past costs and long lead drilling expenditures
of EUR 1.932 million. The EIA conditions precedent were satisfied on 18th of September 2023. The total firm investment
payment obligations by MND are EUR 5.28 million for the drilling, completion and tie-in of the Anshof-2 and Anshof-1
wells. Under the terms of EIA, MND has secured 30% economic interest in the Anshof Field Area by the payment of past
costs as well as the payment of firm investment obligations.
ADX VIE, MND and existing partner XST finalised partnership and operating agreements covering the Anshof Field Area
following the announced clearance of documentation between ADX VIE, MND and existing partner XST by the BMF.
ADX is the operator and retains a 50% economic interest in the Anshof Field Area with partners MND and XST holding a
30% and 20% economic interest respectively in the partnership. ADX will retain a 100% interest in the remainder of the
ADX-AT-II exploration area other than the Welchau Area where ADX holds a 75% economic interest.
Welchau Prospect in Upper Austria - Farmin
On the 29th of November 2022, ADX announced an investment agreement with Kepis & Pobe Financial Group Inc., (KPFG)
a leading Canadian energy finance and development group. KPFG committed to fund 50% of the Welchau-1 well costs
based on a well cost cap of EUR 3.8 million to earn a 20% economic interest in the Welchau Investment Area which includes
the giant Welchau gas prospect (807 BCFE). Subsequently, KPFG satisfied completion conditions, including the payment of
initial funds for long lead items during the first quarter of 2023. As announced on 23 January 2023, KPFG assigned its
interest in the investment agreement to TSXV listed MCF Energy Ltd (MCF).
On the 9th of January 2024, ADX announced that MCF and ADX had agreed to vary the terms of the EIA such that MCF will
fund 50% of the Welchau-1 well costs up to EUR 5.1 million to earn a 25% economic interest in the Welchau Investment
Area. MCF and ADX will pay their economic interest share of Welchau Investment Area related costs of 25% and 75%
respectively once the revised well cost cap has been reached.
ADX and MCF have agreed to enter into a partnership comprised of Articles of Association, production sharing agreement
and a cooperation agreement which will cover the conduct of ongoing operations and sharing of production from the
Welchau Investment Area.
- 82 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 20 – COMMITMENTS AND CONTINGENCIES - continued
ADX-AT-I Investment Area in Upper Austria – MND Partnership Agreement
On the 5th of December 2024, ADX announced an Energy Investment Agreement (EIA) with MND for co-investment in an
exploration area within the ADX-AT-I license (Investment Area), in Upper Austria. In accordance with the terms of the EIA
MND has paid back costs of EUR 0.45 million to ADX and has committed to fund EUR 4.5 million for exploration drilling to
earn a 50% economic interest in the Investment Area. Completion was subject the clearance of the Investment Area
partnership documentation by the BMF which was secured on the 9th of January 2024.
ADX is the operator and retains a 50% economic interest in the ADX-AT-I Investment Area. ADX retains a 100% interest in
the remainder of the ADX-AT-I licence.
Other contingencies
d363 C.R-.AX license – Italy
ADX was advised on the 4th of February 2019 that the Italian senate passed legislation to suspend exploration activities in
all permits that have been approved or are in the process of being approved for a period of up to 18 months (to
approximately August 2020) to enable the government authorities to evaluate the suitability of exploration areas for
sustainable hydrocarbon exploration and production activities. The Italian senate further advised that the suspension will
be extended to the first quarter of 2021. Due to the COVID-19 pandemic the suspension of exploration activities were
further extended.
During the reporting period the Italian licensing authorities offered ADX the opportunity to ratify d363 C.R-.AX prospecting
license. The ratification is subject to a number of conditions including that only the gas potential within its d363C.R-.AX
license is commercially exploited. ADX submitted a report to the Italian authorities detailing the natural gas prospectivity
of the license for gas, upon which the licensing authorities reactive positively and asked ADX to submit a new work program
suitable for exploration and development of the offshore gas resources. Based on discussions with the authorities a
detailed report and work commitment was submitted in October 2022. The commitment for the first 3 years will consist
of, subject to a pending approval:
150 km of seismic data purchase from ENI and Total with a minimum expenditure of EUR 70,000;
2D and 3D seismic reprocessing with a minimum expenditure of EUR 40,000; and
Acquisition of new 2D seismic of 150 line km or 60 sqkm of 3D seismic, subject to the outcome of the
preceding reprocessing and interpretation work. The financial commitments is EUR 500,000.
It should be noted that after each year and fulfilment of the respective work, ADX can drop the license. In year 4, ADX can
elect to drill a well (with a commitment to reach 2500 metres total depth (TD) or drop the license.
- 83 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 21 – RELATED PARTY DISCLOSURES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Share-based payments
(b) Other transactions and balances with Key Management Personnel
Consolidated
31 December
31 December
2023
$
1,013,885
16,433
285,945
2022
$
985,140
14,188
221,311
1,316,263
1,220,639
i) Director Ian Tchacos, through Warroorah Pty Ltd ATF Tchacos Fund and Ian Z Tchacos, provides office premises
to ADX Energy Ltd. The key terms are gross monthly rental of $2,103.87 per month, monthly estimated outgoings
of $334.32 per month (both excluding GST), lease commencing 1 August 2022 for a 12 month term, thereafter on
3 month rolling terms. Rent review to be on 1 July of each year based on CPI. These terms are considered normal
commercial rates. Rental paid, including outgoings, for the year (excluding GST) ended 31 December 2023 totalled
$29,395 (2022: $11,395).
ii)
In the prior year, Director Andrew Childs, through his entity Resource Recruitment provided ADX Energy Ltd office
premises in Subiaco, and paid rent on a month by month basis at normal commercial rates to 31 July 2022. Rental
paid for the year (excluding GST) ended 31 December 2023 totalled $nil (2022: $18,200).
iii) Andrew Childs is Executive Chairman of Xstate Resources Limited (Xstate). Xstate holds a 20% economic interest
in ADX’ Anshof field in Upper Austria.
iv) In July 2023, Company Secretary, Amanda Sparks, through the A & A Sparks S/F A/C and her spouse Anthony
Sparks, provided $100,000 loan notes to ADX Energy Ltd (refer to note 12). The interest rate is 12%. These terms
were considered normal commercial rates. 430,000 free attaching unlisted options with an exercise price of $0.14
and expiring 11 January 2025 were issued with the Loan Notes. During the year, interest of $5,030 was paid or
accrued.
(c) Transactions with Other Related Parties
i)
ii)
In July 2023, Company Secretary, Peter Ironside, through Ironside Pty Ltd , provided
$200,000 loan notes to ADX Energy Ltd (refer to note 12). The interest rate is 8% for $100,000 and 12% for
$100,000. These terms were considered normal commercial rates. 300,000 free attaching unlisted options with
an exercise price of $0.10, and 730,000 free attaching unlisted options with an exercise price of $0.14 and both
expiring 11 January 2025 were issued with the Loan Notes. During the year, interest of $8,384 was paid or
accrued.
In November 2023, Company Secretary, Peter Ironside, through Ironside Pty Ltd and
Ironside Pty Ltd , participated in ADX’s placement (refer to note 15(b)(i)). A total of
1,690,000 shares, together with 845,000 free attaching options were issued to related entities of Peter Ironside
for $129,000. The exercise price of the Placement Options is $ 0.16 with an expiry date of 31 December 2024.
- 84 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 22 – AUDITOR’S REMUNERATION
Amount paid or due and payable to the auditor for:
Audit and review of the financial statements
Other services
Total remuneration of auditors
NOTE 23 – SEGMENT INFORMATION
Consolidated
31 December
31 December
2023
$
2022
$
52,000
-
52,000
50,500
-
50,500
Reportable Operating Segments Identified
For management purposes, the Group has organised its operating segments into three reportable segments as follows:
Sicily Channel Offshore Exploration and Evaluation Segment: this segment includes assets and activities that are
associated with oil and gas exploration offshore Italy.
Romania Exploration and Appraisal/Development Segment: this segment includes assets and activities that are
associated with oil and gas exploration, appraisal and development in that region, and include the costs if the
parent entity, Danube Petroleum Limited.
Austria Production Segment: this segment includes assets and activities that are associated with oil and gas
production in that region. All oil sales are made to a single customer in Austria, and all gas sales are made to a
single customer in Austria.
The following items are not allocated to segments as they are not considered part of core operations of any segment
and are managed on a Group basis.
Interest revenue
Foreign currency gains/(losses)
Corporate costs
- 85 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 23 – SEGMENT INFORMATION - continued
Operating Segments
Year ended 31 December 2023
Revenue and income
Total segment revenue
Result
Segment result after tax
Reconciliation of segment profit after tax to net loss
after tax:
Unallocated revenue and income
Foreign currency gains/(losses)
Unallocated expenditure
Net loss after tax
Sicily
Channel
$
Romania
$
Austria
(Production)
Total
Operations
$
$
-
-
13,178,208
13,178,208
13,178,208
(45,552)
(204,207)
(1,441,731)
(1,691,490)
3,760
(84,892)
(2,437,093)
(4,209,715)
Depreciation, amortisation and impairment included in
segment result
-
-
2,689,510
2,689,510
Assets
Segment assets
Reconciliation of segment assets:
Unallocated cash
Other
Total assets
Liabilities
Segment liabilities
Reconciliation of segment liabilities:
Unallocated liabilities
Total liabilities
Capital expenditure for the year
Segment capital expenditure – oil and gas assets
Reconciliation of capital expenditure:
Unallocated additions
Total capital expenditure
34,075
9,247,218
27,994,830
37,276,123
5,207,126
151,903
42,635,152
(8,232)
(1,254,382)
(23,314,000)
(24,576,614)
(2,317,013)
(26,893,627)
-
-
4,704,621
4,704,621
-
4,704,621
- 86 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 23 – SEGMENT INFORMATION - continued
Operating Segments
Year ended 31 December 2022
Revenue and income
Total segment revenue
Result
Segment result after tax
Reconciliation of segment profit after tax to net profit
after tax:
Unallocated revenue and income
Foreign currency gains/(losses)
Unallocated expenditure
Net profit/(loss) after tax
Sicily
Channel
$
Romania
$
Austria
(Production)
Total
Operations
$
$
-
-
14,452,734
14,452,734
14,452,734
212,844
(268,417)
414,715
359,142
5,067
(44,033)
(2,758,040)
(2,437,874)
Depreciation, amortisation and impairment included in
segment result
-
-
3,254,514
3,254,514
Assets
Segment assets
Reconciliation of segment assets:
Unallocated cash
Other
Total assets
Liabilities
Segment liabilities
Reconciliation of segment liabilities:
Unallocated liabilities
Total liabilities
23,833
8,895,232
22,627,545
31,546,610
675,677
441,005
32,663,292
(5,220)
(675,883)
(19,145,945)
(19,827,048)
(437,012)
(20,264,060)
Capital expenditure for the year
Segment capital expenditure – oil and gas assets
Reconciliation of capital expenditure:
Unallocated additions
Total capital expenditure
-
253,618
2,552,782
2,806,400
-
2,806,400
- 87 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 24 – FINANCIAL RISK MANAGEMENT
The Group is exposed to market risk (commodity, currency and interest rate risks), credit risk and liquidity risk. The Group’s
overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group. The Group uses different methods to measure different types
of risk to which it is exposed. ADX’ Board of Directors (Board) is responsible for approving ADX’s policies on risk oversight
and management and ensuring management has developed and implemented effective risk management and internal
controls. Risk management is carried out by the senior executives under these policies which have been approved by the
Board. Management identifies, evaluates and, if necessary, hedges financial risks.
Commodity price risk
During the year the Group continued generating revenue from its fields in Austria. With this oil and gas production and
revenue, the group is exposed to the Brent Benchmark crude oil price and European gas price fluctuations. Exposure to oil
and gas price risk is measured by monitoring the Group’s forecast financial position and cash flows with various
assumptions. This analysis is regularly performed. Commodity prices’ hedging may be undertaken where the Board of
Directors determines that a hedging strategy is appropriate to mitigate potential periods of adverse movements in
commodity prices and protect forward cash flows to meet commitments. This will be balanced against the desire to expose
shareholders to oil price upside and the reliability of production forecasts.
As at 31 December 2023, no derivative financial instruments were in place.
The hedging program is designed to provide certainty of cash flows during a period of expected ongoing volatility.
Currency risk
The Group’s source currency for the majority of costs is in Euro (EUR). Operating revenue is invoiced in EUR but is indexed
to Dated Brent price which is denominated in United States Dollar (USD). Currency risk arises where the value of a financial
instrument or monetary item fluctuates due to changes in foreign currency exchange rates. The exposure to currency risk
is measured using sensitivity analysis and cash flow forecasting.
The Board has formed the view that in the ordinary course of business it would not be beneficial for the Group to purchase
forward contracts or other derivative financial instruments to hedge any currency risk. Currency risk for operating revenue
is hedged via hedging of the commodity as necessary (see section ‘Commodity price risk’).
During the year the company undertook capital raising activities via the issue of new shares on the ASX. These capital
raisings are priced and received in AUD. Over the time period of a capital raising there is some short-term exposure to
movements in the AUD to EUR exchange rates as part of the funds are used in Europe. At year end, management has
assessed that the entity’s exposure to foreign exchange movements is immaterial due to revenues and costs primarily
in EUR and therefore no further analysis is provided. The Group manages its foreign exchange risk by constantly
reviewing its exposure to commitments payable in foreign currency and ensuring appropriate cash balances are
maintained in EUR and AUD, to meet current operational commitments.
- 88 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 24 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES - continued
Interest rate risk
At balance date the Group’s exposure to market risk for changes in interest rates relates primarily to the Company’s
borrowings. The Group constantly analyses its exposure to interest rates, with consideration given to potential renewal of
existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed.
Given the very low interest rates for variable borrowings, the interest rate risk is considered immaterial.
Borrowings - fixed rate
Borrowings – variable
Borrowings - variable (non-interest bearing)
Total
Liquidity risk
31 December 2023
$
31 December 2022
$
1,500,000
609,394
-
2,109,394
-
1,184,672
-
1,184,672
Liquidity risk is the risk that Group will encounter difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. The Group manages liquidity risk by continuously monitoring
forecast and actual cash flows with scenario analysis. As at reporting date the Group had sufficient cash reserves to meet
its current requirements.
The contractual maturity analysis of payables as at year end are:
31 December 2023
Trade and other payables
Borrowings
Total
31 December 2022
Trade and other payables
Borrowings
Total
Total
$
Less than 1
Year
$
Between 1-5
Years
$
5,136,865
2,109,394
5,136,865
609,394
-
1,500,000
7,246,259
5,746,259
1,500,000
2,336,041
1,184,672
2,336,041
592,336
3,520,713
2,928,377
-
592,336
592,336
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient collateral or
other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures
credit risk on a fair value basis.
Significant cash deposits are with institutions with a minimum credit rating of A+ (or equivalent) as determined by a
reputable credit rating agency e.g. Standard & Poor.
The Group has only one customer for operating revenue being a significant company in Austria. Revenue is received
monthly and hence the credit risk deemed very low. The customer is Austria’s largest energy storage company, and one of
Europe’s leading gas storage facility operators
The Group does not have any other significant credit risk exposure to a single counterparty or any group of counterparties
having similar characteristics.
- 89 -
ADX ENERGY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 25 -PARTNERSHIPS – ANSHOF EOCENE OIL PROJECT
Under ADX’s upper Austria AGS licence, ADX must retain 100% ownership of the licence and is required to act without
restrictions from partners. ADX is permitted to establish a partnership with other parties to allow an economic participation
within the licence area.
ADX has an Anshof Partnership with MND Austria a.s. (MND) and Xstate Resources Limited (ASX: XST) (Xstate). ADX is the
operator and holds an 50% economic interest in the Anshof Discovery Area. MND and Xstate holds a 20% and 30%
economic interest respectively. For the period prior to 8 September 2023, ADX held 80% and Xstate held 20%.
As ADX provides the Partners with an interest in the operating result of Anshof, ADX recognises 100% of all sales revenue
and 100% of expenses associated with the operations and also recognises an expense representing the Partners share of
operating results.
Consolidated
31 December
2023
$
31 December
2022
$
Partner Share of Operations (included as cost of goods sold)
Partners share of ANS-3 operations profit/(loss) – refer to note 2
89,427
(30,278)
Operations – ANS-3
Sales revenue
Cost of Goods Sold (excluding depreciation and amortisation)
Profit allocated:
ADX VIE GmbH
MND Austria a.s.
Xstate Resources Limited
NOTE 26 - SUBSEQUENT EVENTS
3,433,391
(2,851,270)
825,444
(976,836)
582,121
(151,392)
492,694
(26,997)
116,424
582,121
(121,114)
-
(30,278)
(151,392)
On 2 February 2024, ADX issued the following shares and options. These amounts were accrued in the 31 December 2023
financial statements:
a.
b.
c.
214,660 shares issued pursuant to ADX’ Directors’ Share Plan, approved by Shareholders on 12 May 2023. The shares
were issued to directors in consideration of remuneration elected to be paid in shares for the quarter ended 31
December 2022 ($22,969).
44,859 shares issued to ADX’s Company Secretaries and consultants in consideration of remuneration elected to be
paid in shares for the quarter ended 31 December 2023 ($4,800).
131,425 Options granted to Director Ian Tchacos, as approved by Shareholders on 12 May 2023. The options were
granted in consideration of consultancy fees remuneration elected to be paid in options for the quarter ended 31
December 2023 (value $14,062). The options have a nil exercise price and expire on 31 January 2028.
On 25 March 2024, 9,968,337 unlisted options were exercised raising $1,296,634.
There are no other matters or circumstances that have arisen since 31 December 2023 that have or may significantly affect
the operations, results, or state of affairs of the Group in future years.
- 90 -
In.Corp Audit & Assurance Pty Ltd
ABN 14 129 769 151
Level 1
6-10 O’Connell Street
SYDNEY NSW 2000
Suite 11, Level 1
4 Ventnor Avenue
WEST PERTH WA 6005
GPO BOX 542
SYDNEY NSW 2001
T +61 2 8999 1199
E team@incorpadvisory.au
W incorpadvisory.au
ADX ENERGY LTD
INDEPENDENT AUDITOR’S REPORT
To the members of ADX Energy Ltd
Opinion
We have audited the financial
report of ADX Energy Ltd (“the
Company”) and its controlled entities (“the Group”) which comprises the
consolidated statement of financial position as at 31 December 2023,
the consolidated statement of profit or loss and other comprehensive
income,
the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended on that
date and notes to the financial statements, including material accounting
policy information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in
accordance with the Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at
31 December 2023 and of its financial performance for the year
then ended; and
b) complying with Australian Accounting Standards and
the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing
Standards. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in
accordance with
the
Corporations Act 2001 and the ethical requirements of the Accounting
Professional & Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (“the
Code”) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance
with the Code.
independence requirements of
the auditor
the
that
We confirm
the
Corporations Act 2001, which has been given to the directors of the
Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
independence declaration required by
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Liability limited by a scheme approved under Professional Standards Legislation
ADX ENERGY LTD
INDEPENDENT AUDITOR’S REPORT (continued)
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter – Revenue. Refer to Note 2
to the financial statements
How our Audit Addressed the Key Audit
Matter
The Group generated revenue of $13,178,208
predominately from the sale of gas and oil.
Revenue recognition is considered to be a key
audit matter given the significance of revenue to
the group’s results and performance.
Our procedures over revenue included but were
not limited to the following:
• We documented and assessed the processes
and controls in place to recognize revenue;
• We verified a sample of oil and gas sales
revenue transactions and associated receipts
to determine they were accurately accounted
for;
• We reviewed the accounting policy
for
revenue recognition and ensured it was in
accordance with AASB 15 “Revenue”; and
• We assessed the appropriateness of
the
revenue disclosures included in the financial
report.
Key Audit Matter – Oil and Gas Properties.
Refer to Note 9 to the financial statements
How our Audit Addressed the Key Audit
Matter
The Group’s principal assets are oil and gas
production plant and equipment with a carrying
value of $25,145,587 as at 31 December 2023.
The carrying value of these assets is considered
to be a key audit matter given they represent
the
approximately 60% of
Group.
the total assets of
Our procedures over oil and gas properties
included but were not limited to the following:
• We verified a sample of additions to assure
the correct capitalisation process and the
existence of the asset;
• We reviewed management’s assessment for
impairment;
• We applied our knowledge of
the business
and corroborated our work with publicly
available external information; and
• We assessed the appropriateness of
disclosures included in the financial report.
the
ADX ENERGY LTD
INDEPENDENT AUDITOR’S REPORT (continued)
Key Audit Matters (continued)
Key Audit Matter
retirement
obligations. Refer to Note 14 to the financial
statements
– Asset
The Group has a significant asset retirement
obligation provisions
the Austrian and
for
Romanian oil and gas properties.
These provisions are considered to be a key
audit matter given they are subject to a significant
level of judgement and are material in the context
of the financial statements as a whole.
How our Audit Addressed the Key Audit
Matter
the asset
Our procedures over
retirement
obligation provisions included but were not limited
to the following:
• We reviewed management’s estimate,
the
useful
the assets
forming part of the asset retirement obligation;
• We discussed with management as to the
their
lives and valuation of
surrounding
compliance
regulatory
retirement obligations;
• We reviewed the compliance of the accounting
treatment of
the asset retirement obligation
with AASB 137 Provisions, Contingent
Liabilities and Contingent Assets, and
• We assessed the appropriateness of
disclosures included in the financial report.
the
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for
information comprises the
information included in the Group’s annual report for the year ended 31 December 2023, but does not
include the financial report and our auditor’s report thereon.
information. The other
the other
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
ADX ENERGY LTD
INDEPENDENT AUDITOR’S REPORT (continued)
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation and fair presentation of the financial
report in accordance with Australian Accounting Standards and for such internal control as the directors
determine is necessary to enable the preparation of the financial report to be free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the director either intends to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf.
We communicate with the directors regarding, amongst other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
that we have complied with relevant ethical
We also provide the directors with a statement
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters.
We describe those matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communications.
ADX ENERGY LTD
INDEPENDENT AUDITOR’S REPORT (continued)
REPORT ON THE REMUNERATION REPORT
Report on the Remuneration Report
We have audited the remuneration report included in the directors’ report for the year ended
31 December 2023.
In our opinion the remuneration report of ADX Energy Ltd for the year ended 31 December 2023
complies with section 300A of the Corporations Act 2001.
Responsibilities for the Remuneration Report
The directors of
Remuneration Report in accordance with section 300A of the Corporations Act 2001.
the Company are responsible for
the preparation and presentation of
the
Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
In.Corp Audit & Assurance Pty Ltd
Graham Webb
Director
28 March 2024
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 25 March 2024
a) Substantial Shareholders (who have lodged notices with ADX Energy Ltd)
Name
None
Number of Shares Disclosed in
Substantial Holder Notice
b) Shareholder Distribution Schedule
Size of Holding
1 -
1,001 -
5,001 -
10,001 -
1,000
5,000
10,000
100,000
100,001 and over
Total Shareholders
Number of shareholders holding less
than a marketable parcel
Voting Rights
Number of
Shareholders
93
139
451
1,031
438
2,152
188
Number of
Ordinary Shares
28,976
452,899
3,782,857
40,391,976
394,144,723
438,801,431
Percentage of
Issued Capital
0.01
0.10
0.86
9.21
89.82
100.00
Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at meetings of
Shareholders or classes of Shareholders:
(i)
each Shareholder entitled to vote may vote in person or by proxy or attorney, Representative;
(ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a
Shareholder has one vote; and
(i) on a poll every member entitled to vote and present in person or by proxy or attorney or representative duly
authorised shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a
proxy, attorney or Representative, have one vote for the Share, but in respect of partly paid Shares, shall
have such number of votes being equivalent to the proportion which the amount paid (not credited) is of
the total amounts paid and payable in respect of those Shares (excluding amounts credited).
There are no voting rights for Option holders or Performance Rights.
c) Securities Subject to Escrow:
There are no securities subject to escrow.
- 96 -
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
d)
Twenty largest shareholders:
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR PAUL FINK
EQUITY TRUSTEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
EONIA PTY LTD
BNP PARIBAS NOMINEES PTY LTD
NGX COMMODITIES LTD
MR BRIAN THOMAS CLAYTON + MRS JANET CLAYTON
WARROORAH PTY LTD
IRONSIDE PTY LTD
HIGHBRIDGE VIEW PTY LTD
MOMENTIUS PTY LTD
IRONSIDE PTY LTD
IRONSIDE PTY LTD
MR SYED KHALIL BIN SYED IBRAHIM
MR TIMOTHY FRANCIS CLIVE MCDONNELL
BOND STREET CUSTODIANS LIMITED
Remaining Holders Balance
Shares on issue
Number of
Ordinary
Shares
63,683,136
24,434,257
24,133,702
22,560,100
11,382,251
6,500,000
5,931,431
5,289,901
5,135,737
4,223,584
4,133,334
4,066,416
3,515,222
3,264,000
3,261,205
3,130,953
3,100,000
3,000,000
2,913,312
2,615,036
% of
Issued
Capital
14.51
5.57
5.50
5.14
2.59
1.48
1.35
1.21
1.17
0.96
0.94
0.93
0.80
0.74
0.74
0.71
0.71
0.68
0.66
0.62
206,273,577
47.01
232,527,854
438,801,431
- 97 -
ADX ENERGY LTD
ADDITIONAL SHAREHOLDER INFORMATION
e) Unlisted Options (Holders of more than 20%):
Unlisted Options
Unlisted Options
Unlisted Options
Number
13,231,674
161,608
31,865,000
Exercise Price
13 cents
Nil cents
16 cents
Expiry Date
10/08/2024
31/10/2024
31/12/2024
Unlisted Options
3,000,000
10 cents
11/01/2025
Unlisted Options
5,150,000
14 cents
11/01/2025
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
725,000
6,350,000
314,584
245,625
500,000
329,465
185,796
311,719
269,532
380,358
283,929
275,893
300,000
332,291
131,425
Total Options
64,343,899
Nil cents
17 cents
Nil cents
Nil cents
17 cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
Nil cents
31/01/2025
30/04/2025
31/05/2025
31/07/2025
31/03/2026
31/10/2025
31/01/2026
31/05/2026
31/07/2026
31/10/2026
31/01/2027
31/05/2027
31/07/2027
31/10/2027
Nil cents
31/01/2028
Holders of >20%
No holder with > 20%
Mr Ian Tchacos (100%)
HSBC Custody Nominees
(Australia) Limited
(27.51%), all others each
holding less than 20%
Jetosea Pty Ltd (50%), all
others each holding less
than 20%
Jetosea Pty Ltd (50%), all
others each holding less
than 20%
Mr Ian Tchacos (100%)
Employee Incentive Plan
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr John Begg (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (100%)
Mr Ian Tchacos (66%) and
Mr Paul Fink (34%)
Mr Ian Tchacos (100%)
- 98 -
ADX ENERGY LTD
TENEMENT SCHEDULE
Permit
Onshore Austria, Zistersdorf and Gaiselberg Production License
Upper Austria AGS Licenses (a)
Onshore Romania, Parta (b)
Onshore Romania, Iecea Mare Production Licence (b)
Offshore Italy, d363C.R-.AX (c)
% held
100%
100%
100%
100%
100%
(a) Concession agreements for exploration, production and gas storage in Upper Austria (Upper Austria AGS).
Anshof Discovery Area
ADX announced a farmout to ASX listed Xstate Resources Limited (Xstate) to earn a 20% economic interest in the
Anshof Discovery Area. Xstate have earned their 20% economic interest.
ADX announced a subsequent Anshof Investment Agreement with MND Austria a.s (MND) where MND has
secured a 30% economic interest in the Anshof Discovery Area by providing cash payments to ADX and funding
60% of the Anshof work program funding.
In accordance with Anshof Discovery Area Partnership agreements the economic interests in the Anshof-2 well
are 60% ADX and 40% MND.
XST has elected not to participate in the Anshof-2 well. ADX and MND agreed to fund XST’s share of well costs
on a 50:50 basis and will in turn obtain the right to 60% and 40% respectively of production from the well unless
XST opts to buy back into the well at a premium of 500% to well costs. XST retains its 20% economic interest in
the remainder of the Anshof Discovery Area Partnership (i.e. Anshof Discovery Area less the Anshof-2 well) with
both ADX and MND’s economic interests remaining at 50% and 30% respectively.
Welchau Farmin Area
ADX has executed an Energy Investment Agreement with MCF Energy Ltd via its subsidiary MCF Energy GmbH
(MCF) to fund 50% of the Welchau-1 well costs up to a well cost cap of EUR 5.1 million to earn a 25% economic
interest in the Welchau Investment Area. Upon completion of MCF’s funding obligations ADX will hold a 75%
economic interest in the Welchau Investment Area.
ADX-AT-I Investment Area
ADX announced an Exploration Investment Agreement with MND Austria a.s (MND) where MND will secure a
50% economic interest in the Exploration Investment Area by providing cash payments to ADX and funding 100%
of an agreed exploration work program of EUR 4.5 million. The Exploration Investment Area is part of the ADX-
AT-I licence area.
ADX retains a 100% interest in the remainder of the ADX-AT-II exploration license and the remainder of the ADX-
AT-I exploration license.
(b) ADX holds a 49.2% shareholding in Danube Petroleum Limited (Danube). The remaining shareholding in Danube
is held by Reabold Resources Plc. Danube via ADX Energy Panonia holds a 100% interest in the Parta Exploration
license (including a 100% interest in the Parta Appraisal Sole Risk Project) and a 100% interest in the Iecea Mare
Production license. ADX is the operator of the permit pursuant to a Services Agreement with Danube.
(c) ADX has commenced a process with the Italian Designated Authority to convert the exclusively awarded
application to a ratified licence. This process was commenced after the award by the Ministry of Industry.
- 99 -